Oil experts warn stockpiles being depleted just as peak summer demand due

(Originally published May 12 in “What in the World“) The UAE, it turns out, did join the fight against Iran back in early April.

After lobbying the U.N. Security Council unsuccessfully to mount a joint operation with allies in Asia and Europe to reopen the Strait of Hormuz, the UAE conducted its own secret strikes on Iran, including an attack on an Iranian oil refinery. At the time, both the UAE and Saudi Arabia were warning Tehran that further attacks on their territory and infrastructure could prompt them to join the U.S.-Israeli attack on Iran. The UAE, in particular, has suffered the largest volume of Iranian strikes—more than 2,800 missiles and drones so far.

The Strait of Hormuz, meanwhile, remains closed. Saudi Aramco CEO Amin Nasser warned Monday that global gasoline and jet fuel stockpiles are being rapidly drained to critically low levels ahead of peak summer demand. JPMorgan analysts warned on Monday that commercial oil stockpiles could fall so low by early June that the world can no longer use them to make up for lost Gulf shipments. And Aramco’s Nasser said analysts were likely overestimating the amount of oil that can still be withdrawn from stockpiles, as some volumes have to be retained just to keep tanks and pipelines in working order.

Worries that Trump may resume military attacks against Iran after rejecting its response to his peace-talk proposal sent Brent crude futures up 0.29% Tuesday morning, to $104.51/bbl.