Oil Markets Remain Tight: Implications for Investors and Businesses in Oman
LONDON: Global oil markets may encounter tighter supplies and sustained price pressures, even if the United States and Iran reach a peace agreement. Analysts and industry executives have expressed concerns that depleted inventories and disrupted shipping routes are continuing to strain the energy system.
While commercial stockpiles, emergency reserves, and oil stored at sea have temporarily mitigated the shock from the Middle East conflict, industry leaders assert that the full effects have yet to penetrate global markets.
As countries head into the peak summer demand season in the Northern Hemisphere—during which fuel consumption typically rises due to travel, aviation, agriculture, and freight activity—analysts expect inventories to continue declining in the coming weeks.
Goldman Sachs has projected that global crude inventories could drop to their lowest levels since at least 2018, even if oil flows through the Strait of Hormuz begin to recover soon. TotalEnergies Chief Executive Patrick Pouyanne noted that the world would still be left with very low inventories, estimating that approximately 500 million barrels have already been consumed from storage.
Equinor’s Chief Executive Anders Opedal indicated that it might take at least six months for the market to stabilize, even in the event of a return to peace.
Although the price of benchmark Brent crude fell sharply on Wednesday following indications of progress in negotiations between Washington and Tehran, analysts remain cautious, stating that physical fuel markets will likely continue to face tight conditions due to supply disruptions and shipping delays.
A Reuters poll from last week predicted that Brent crude would average $86.38 per barrel in 2026, compared to around $62 at the start of this year. Global inventories are now expected to decline to approximately 98 days of demand by the end of May, down from 105 days prior to the conflict, according to Goldman Sachs.
Rystad Energy has estimated that the world has already suffered a loss of around 600 million barrels of oil supply since the onset of hostilities, with total losses potentially reaching up to 2 billion barrels before flows fully normalize.
The situation is similarly affecting natural gas markets, with disruptions to Qatar’s liquefied natural gas (LNG) production expected to eliminate between 30 million and 50 million tonnes of LNG supply, equivalent to as much as 11% of the annual global supply.
Industry leaders have cautioned that returning to normal oil flows will require time, even after shipping routes reopen. Exxon Mobil Chief Executive Darren Woods stated that it could take one to two months to clear shipping backlogs and restore supply chains after operations in the Strait of Hormuz resume.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The current tightening of global oil supplies presents both opportunities and risks for businesses in Oman, especially those reliant on oil exports. As inventories decline and demand rises during the summer, smart investors should consider strategic investments in energy infrastructure to capitalize on potential price hikes and ensure supply resilience. Entrepreneurs may also explore diversification into renewable energy, leveraging the urgent need for sustainable energy solutions amid ongoing volatility in oil markets.
