The Next Oil Rally Could Be Driven By Stockpile Refilling

Authored by Irina Slav via OilPrice.com,

• The Middle East conflict has disrupted more than 1 billion barrels of oil supply, but China's massive strategic crude stockpile helped offset the shock by sharply reducing imports, preventing oil prices from surging even higher.

• Countries are now racing to build or replenish strategic petroleum reserves, with the IEA planning to refill the 400 million barrels it released during the crisis and major importers like India looking to expand their emergency stockpiles.

• This wave of reserve rebuilding could create a major new source of oil demand, supporting crude prices once the Middle East crisis fully subsides as governments prioritize energy security alongside the energy transition.

The war in the Middle East has cost the world over a billion barrels in cumulative supply losses. Yet luckily, China had built a reserve of about the same size before the closure of Hormuz, so it stopped buying so much oil, arresting the inevitable price jump. Now, everyone wants to build an oil reserve—or needs to replenish the ones they already have.

Back in March, soon after the U.S. and Israeli attacks on Iran began, prompting the latter to retaliate by closing the Strait of Hormuz, the International Energy Agency said it would READ MORE AT SOURCE »