U.S. commercial crude oil stocks dropped sharply, declining by over 7 million barrels week-over-week to 426.5 million barrels on June 5, according to the Energy Information Administration's latest weekly report. The drawdown excludes the Strategic Petroleum Reserve.
Supply-side pressures are mounting as the U.S. military carried out strikes against multiple targets in Iran for a second consecutive day, according to wire reports. The sustained military action threatens to disrupt crude flows from the region, though immediate production impacts remain unclear.
Inventory levels now sit well below the five-year average for this time of year, signaling tightening supply conditions. The 7-million-barrel decline outpaced typical seasonal draws, with refinery utilization and export demand both contributing factors.
Geopolitical risk premiums are likely to persist in oil markets as the Iran strikes escalate. The Strait of Hormuz, a critical chokepoint for roughly 20% of global oil transit, faces elevated threat levels even as no supply disruptions have been reported.
Analysts warn that extended military operations could trigger retaliatory measures from Tehran, potentially affecting Iraqi and Gulf production. However, the White House has not indicated plans to expand the operation beyond current targets.