The global oil market was tight even before the Russian invasion of Ukraine, but Putin’s war and its consequences on Russian crude supply and energy prices have the potential to hurl the market into a major supply shock comparable with the 1973 Arab oil embargo.
Oil stocks in major oil-consuming developed economies, including in the United States, have been falling steadily for several months now as demand rebounds.
U.S. market balances are tight, with commercial crude inventories of 411.6 million barrels, 13 percent below the five-year average for this time of the year. Gasoline inventories are some 1 percent above the five-year average, but distillate fuel inventories are about 18 percent lower, and propane/propylene inventories are 21 percent below the five-year average for this time of year, the EIA’s latest inventory report for the week ending March 4 showed.
As demand…
