EIA: Oil stocks sink as Iran conflict continues to drive stronger export-led draw

US commercial crude oil inventories fell sharply by 4.3 million barrels in the week ended 8 May to 452.9 million barrels, as the Iran war roiled oil markets and buyers increasingly turned to US barrels for supply.

The draw was larger than market expectations, with analysts in a Reuters poll looking for a 2.1 million-barrel decline, underscoring a tighter-than-expected crude balance. Stocks are now about 0.3% below the five-year seasonal average.

Crude inventories fell amid an increase in exports, with the EIA noting that stronger outbound flows were a key driver of the weekly draw as geopolitical tensions disrupted trade routes and redirected demand toward the US. At the same time, domestic crude production rose by 137,000 barrels per day.

Crude imports averaged 5.9 million barrels per day, up 424,000 barrels per day week on week, though this was outweighed by stronger exports. Total motor gasoline inventories fell by 4.1 million barrels, widening the deficit to 5% below the five-year average, while distillate stocks edged up 0.2 million barrels but remain 9% below seasonal norms.

Refinery activity also firmed, with crude oil inputs rising by 369,000 barrels per day to 16.4 million barrels per day, and utilisation climbing to 91.7%. Gasoline production increased to 9.8 million barrels per day, while distillate output eased slightly to 4.8 million barrels per day, reflecting mixed product dynamics.

Written by: Farid Muzaffar