UAE oil stocks collapse to the lowest level on record

• Heavy distillates used in marine fuel dropped 14% to 3.058 million barrels, hitting a third consecutive record low, while light distillates fell 2.7% to 2.680 million barrels
• Brent crude surged to $115 per barrel driven by Iranian threats to critical shipping lanes and U.S. pressure extending blockades on Iranian ports
• Inventories have plummeted from above 8 million barrels in early March, with traders positioning for prolonged volatility rather than quick de-escalation

Summary: UAE Oil Inventories Hit Record Lows Amid Iran Conflict

Oil inventories at the United Arab Emirates' Fujairah storage hub have plunged to historic lows, falling 6.3% week-on-week to 6.982 million barrels. This marks the fourth consecutive record low since conflict with Iran escalated, with total inventories down approximately 66% since the conflict began.

Key Inventory Movements:

• Heavy distillates (marine fuel, power generation): dropped 14% to 3.058 million barrels, third consecutive record low
• Light distillates (gasoline, naphtha): fell 2.7% to 2.680 million barrels, second all-time low
• Middle distillates (jet fuel, diesel): rose 9.1% to 1.244 million barrels, a three-week high
• For context, inventories stood above 8 million barrels in early March

Market Impact:

Brent crude oil surged to $115 per barrel, the highest level since June 2022, driven by escalating Iran-Israel tensions. The rally reflects market concerns over potential disruptions to critical shipping lanes and Iranian threats to key export routes.

Geopolitical Developments:

Washington is extending its blockade on Iranian ports, while former President Trump issued warnings to Iran via Truth Social, urging the country to "get smart soon." Traders are positioning for prolonged volatility rather than quick de-escalation.

Market Outlook:

The severe inventory drawdown at a major Middle Eastern storage hub, combined with elevated crude prices, signals mounting supply strain in the region. Sentiment remains broadly bullish as the energy market prices in continued disruption risk from the ongoing conflict.

*Source: S&P Global, reported April 29*