The United States Energy Information Administration (EIA) has reported a sharp decrease in commercial crude oil inventories, dropping by approximately 8 million barrels during the week ending May 29, 2026. This decline was roughly twice the amount analysts had expected and has put upward pressure on crude oil prices globally. The latest data shows that commercial crude stocks fell to around 434 million barrels, which is about 3% below the five-year average for this time of year.
This notable reduction in crude supplies is driven mainly by two key factors: soaring export demand and strong domestic refinery activity. US crude oil exports reached nearly 5.9 million barrels per day during the period, marking the second-highest level on record. Countries in Asia and Europe are increasingly relying on American crude as traditional sources from the Middle East face disruptions due to ongoing geopolitical tensions, particularly the conflict involving Iran.
Refinery utilization rates in the US have remained high at approximately 94.7%, as refiners process more crude to meet seasonal demand and compensate for reduced international supplies. Despite this heavy refining activity, gasoline and distillate stocks saw unexpected increases of 3.4 million barrels and 1.5 million barrels respectively, likely due to weaker demand following the Memorial Day holiday weekend.
The ongoing war in Iran has significantly altered global oil supply chains, especially with disruptions around the Strait of Hormuz, a critical passage for about one-fifth of the world’s petroleum shipments daily. This has forced many buyers to shift their procurement strategies towards US crude, contributing to near-record export levels. Meanwhile, the Strategic Petroleum Reserve (SPR) has seen an additional draw of around 8 million barrels last week, lowering stockpiles to their lowest point since early 2024.
Overall, US crude inventories have dropped by nearly 64 million barrels since late February, coinciding with escalations in Middle Eastern conflicts. This sustained drawdown signals a structural change in market dynamics rather than a temporary fluctuation. The market is currently experiencing backwardation, where near-term prices are higher than future prices, encouraging traders and refiners to pull more crude out of storage.
Investors are closely watching upcoming EIA reports for signs that this trend will continue. A third consecutive weekly decline exceeding 7 million barrels could further accelerate oil price adjustments and impact broader inflation forecasts heading into summer months. Meanwhile, total product supplied in the US—a key measure of oil demand—has averaged about 20.4 million barrels per day over recent weeks, showing a modest increase compared to last year.
In summary, the EIA’s latest report highlights a tightening US crude oil market influenced by strong export demand and high refinery throughput amid geopolitical uncertainties. These developments are pushing inventory levels lower and supporting higher oil prices globally.
