Global oil markets have reached near-minimum operating levels in Asia, with Europe and the U.S. facing similar risks, according to Jeff Currie [1].
These dwindling inventories threaten global energy stability during a period of heightened geopolitical tension. If supply cannot meet demand, the resulting shortages could trigger price volatility and disrupt industrial output across three continents.
Currie, a senior energy analyst at Carlyle Group, said the situation in Asia has already reached what he termed "tank bottoms" [1]. He said that Europe is not far behind in reaching these critical lows [1].
While Asia and Europe struggle with current levels, the U.S. remains vulnerable. Currie said the United States could see shortages as early as July [2]. This warning comes as the global market grapples with significant supply disruptions, including conflicts related to Iran, that have softened crude oil futures [1, 2].
Despite the drop in futures, the cost of refining remains extreme. Currie said crack spreads are currently among the highest since the mid-1980s [1]. This disparity indicates that while the raw cost of crude may fluctuate, the cost of producing refined products, like gasoline and diesel, remains historically high.
Currie discussed these trends during an appearance on Bloomberg Television and in reports earlier this year [1, 2]. He said that the combination of low inventories and high refining costs creates a precarious environment for global energy security.
“"We are at tank bottoms in Asia."”
The convergence of 'tank bottom' inventories in Asia and Europe with potential U.S. shortages suggests a systemic failure in the global oil buffer. When crack spreads remain at historic highs while futures soften, it indicates a bottleneck in refining capacity rather than a lack of raw crude. This imbalance makes the global economy hypersensitive to any further geopolitical shocks in oil-producing regions.
