European oil shortages could emerge by month-end as inventories hit multi-year lows

Global oil inventories are declining at an unprecedented pace, with strategists forecasting that stockpiles may not recover until December 2027.

The situation in the Strait of Hormuz, a critical shipping chokepoint, has intensified concerns about physical shortages in Europe by the end of May.

This development has already triggered a sharp repricing in energy markets, with Brent crude and other key benchmarks reflecting heightened risk premiums.

The depletion of supply buffers is being driven by a combination of geopolitical tensions and reduced throughput in the Hormuz region.

UBS analysts have highlighted that if the current trajectory continues, global oil stockpiles could reach near-record lows by the end of the month.

This has raised alarms among major oil companies, which are now warning of potential price volatility and operational challenges.