The International Monetary Fund states global oil buffers are exhausted, leaving prices vulnerable to supply disruptions amid renewed Middle East risks.
Oil markets have used up all three ‘shock absorbers’ that previously prevented price surges, the IMF said. Spare capacity, demand compression, and inventories are depleted, reducing resilience to new supply shocks.
Brent crude briefly exceeded $100 per barrel in mid-July before stabilizing after the U.S. paused hostilities. The IMF noted inventories remain drawn down, leaving markets in a weaker position if tensions escalate.
Rising geopolitical risks in the Strait of Hormuz could further strain supplies, with limited room for markets to absorb additional disruptions without sharp price increases.