US oil stocks surge as Iran war disrupts global energy flows — API reports gains in crude, gasoline, distillate inventories

US crude oil, gasoline and distillate inventories all climbed last week, according to the American Petroleum Institute (API), as the market grapples with a prolonged US-Iran war and disruptions to oil shipping in the Middle East. The API reported crude inventories rose by 7.1 million barrels, gasoline stocks increased by 1.5 million barrels, and distillate inventories gained 1.6 million barrels in the week ending September 11.

These figures are preliminary estimates, ahead of the more detailed data expected from the Energy Information Administration (EIA). API data are frequently utilized by oil traders and companies. The increase in US inventories follows an unusual supply shock in global oil markets, with oil prices spiking above $100 per barrel, Brent crude reaching approximately $107.90, and West Texas Intermediate (WTI) climbing above $104.95 due to escalating tensions in the Middle East.

The Strait of Hormuz has become a key chokepoint, with only four commodity vessels passing through on Monday, compared to the pre-war average of around 125 daily transits. This has severely impacted global crude and liquefied natural gas (LNG) flows through the waterway. Additionally, Saudi Arabia's East-West oil pipeline has been disrupted, further straining alternative export routes.

While higher US inventories may not guarantee an adequately supplied global oil market, they do indicate that the US is accumulating stock while facing constraints in international supply due to shipping bottlenecks, damaged infrastructure, and reduced exports from the Middle East. A comprehensive government report by the EIA will provide more definitive data on crude production, refinery utilization, imports, exports, and petroleum-product demand.