Global Refining Capacity Down 9%, U.S. Crude Draws 4.3M, OPEC Cuts Demand Growth
Refining capacity fell 9% after attacks linked to Iran and Ukraine, while U.S. crude stocks dropped 4.3 million barrels, 0.3% below the five-year average. OPEC output is down 9.7 million bpd since the Hormuz closure, and 2026 demand growth forecasts were cut to 1.17 million bpd from 1.38 million.
1. Refining Capacity Disruptions
Attacks related to Iran and Ukraine conflicts have knocked out nearly 9% of global oil refining capacity in recent months. This reduction has intensified supply constraints by limiting processing throughput across key facilities.
2. U.S. Inventory Drawdown
Data shows U.S. crude inventories declined by 4.3 million barrels in the week ended May 8, placing stocks roughly 0.3% below the five-year average for this period. The drawdown reflects tighter domestic supply amid heightened geopolitical tensions.
3. OPEC Supply Cuts and Demand Revision
OPEC output has fallen by about 9.7 million barrels per day since February’s closure of the Strait of Hormuz, prompting a cut in global demand growth forecasts for 2026 to 1.17 million bpd from 1.38 million bpd. The downward revision underscores cautious demand expectations amid ongoing market volatility.