Is the world going to run out of oil soon? Goldman weighs in

Goldman Sachs Commodities Research has highlighted growing concerns over the speed of global oil stock depletion, warning that while total aggregate levels remain above emergency thresholds, certain regions and refined products are approaching critical lows.

According to an oil analyst report released recently, the most immediate shortage risks are concentrated in petrochemical feedstocks, such as naphtha and LPG, as well as jet fuel in Europe and emerging markets in Asia.

The report estimates that total global oil stocks, which include visible and invisible, crude and refined products, currently stand at 101 days of global demand (DoD). The figure is projected to fall to 98 days by the end of May, approaching the lowest levels recorded in the past eight years.

Goldman analysts noted that while aggregate stock estimates remain above the 61 DoD minimum emergency level required by the European Union, the current “depletion speed” is more concerning than the absolute aggregate level.

The speed of the supply losses suggests that easily accessible refined product buffers are thinning rapidly, potentially leaving the global system vulnerable to further disruptions.

A significant factor contributing to the local imbalances is the high concentration of stocks in specific regions, such as China and the United States, alongside increasing product export restrictions.

For example, while China’s crude stocks remain near record highs, inventories in Europe and other parts of Asia are significantly more stretched.

Goldman Sachs indicated that these regional differences, combined with the logistical challenges of moving “on water” stocks to “landed” storage, significantly understate the actual risk of country-specific product shortages.

Under current projections, the global oil system’s minimum operational landed storage level is estimated at approximately 30 to 40 days of demand.

If regional stockpiles continue to fall at the current pace without a corresponding increase in refinery output or a shift in export policies, the risk of localized fuel “runs” or industrial outages could escalate.