By JBizNews Desk

SINGAPORE — Jeff Currie, chief strategy officer of energy pathways at Carlyle Group and co-chairman of Abaxx Markets, warned Monday, May 25, 2026, that Asian oil inventories have now fallen to so-called minimum operating levels and that Europe is likely only weeks behind, with the United States potentially facing meaningful physical supply shortages by July as the war with Iran continues to disrupt shipping through the Strait of Hormuz.

Speaking to CNBC on the sidelines of the UBS Wealth Conference in Singapore, Currie said headline global inventory figures are giving markets a false sense of security because a significant portion of stored crude oil cannot actually be used. Much of the world’s inventory, he said, is operational oil required to keep pipelines, terminals, storage caverns, and refining systems functioning safely.

“Asia is already at tank bottoms,” Currie said, describing a situation where inventories have effectively reached minimum operating requirements. Europe, in his view, is roughly four weeks behind, while the United States — still temporarily insulated by Strategic Petroleum Reserve flows and strong domestic production — could begin feeling genuine physical tightness by July.

Currie, formerly the longtime global head of commodities research at Goldman Sachs Group Inc., remains one of the most closely watched voices in global energy markets after helping shape Wall Street’s understanding of the post-2020 commodity supercycle.

The stress is already becoming visible inside refined-product markets. Currie noted that jet fuel prices surged first before easing, only for diesel prices to move sharply higher afterward. Diesel in Singapore is now trading above jet fuel, reflecting how refiners are struggling to allocate shrinking crude supplies across transportation, industrial, and aviation demand heading into peak summer consumption season.

The sequencing he outlined presents a stark picture of the next several weeks: Asia is already depleted, Europe is approaching similar conditions, and the United States could begin seeing tighter physical balances just as summer driving demand accelerates.

Currie’s warning came despite a sharp decline in crude prices Monday. Brent crude fell roughly 5% to around $97.61 per barrel amid renewed hopes for a diplomatic breakthrough between Washington and Tehran. But Currie argued that financial markets are focusing excessively on headlines while ignoring the slower-moving physical reality underneath.

“The market is trading diplomacy while inventories continue drawing down,” one commodities trader attending the conference summarized afterward.

The broader geopolitical backdrop remains highly unstable. Iran’s foreign ministry said Monday that no agreement with the United States was close, despite President Donald Trump signaling that negotiations were progressing constructively. Trump also confirmed that the U.S. naval blockade targeting Iranian shipping would remain fully in place until any agreement is formally signed and verified.

The International Energy Agency had previously assumed a reopening of the Strait of Hormuz by late May under its baseline market projections — a timetable that has now quietly passed without resolution.

The implications extend far beyond crude oil prices themselves. European refiners have increasingly depended on accelerated imports of U.S. crude exports to offset shortages tied to Hormuz disruptions. But Currie warned those temporary flows cannot continue indefinitely if U.S. domestic inventories begin tightening simultaneously.

Once Strategic Petroleum Reserve drawdowns slow and domestic inventories tighten further, Europe could rapidly face the same structural shortages already emerging in Asia.

The result could be mounting pressure across diesel, jet fuel, gasoline, shipping costs, and refining margins through the second half of the summer.

Currie’s comments also landed at a delicate moment for global central banks. Earlier Monday, the Bank of Israel cut interest rates by 0.25 percentage points to 3.75% while warning that global inflationary pressures tied to energy markets remain elevated. The Federal Reserve, European Central Bank, and Bank of England have each acknowledged in recent weeks that another sustained energy shock could complicate expected rate-cut paths later this year.

For oil markets, Currie’s framework increasingly suggests the coming months may be driven less by speculative positioning and more by simple physical availability.

If Asia is already operating at minimum inventory levels, Europe is only weeks behind, and the United States begins tightening by July, the global energy system could enter peak summer demand with very little operational cushion remaining.

The question now is whether diplomacy can move quickly enough to stabilize flows before physical shortages begin forcing prices materially higher again.

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