World's emergency oil stocks fall fast, commercial reserves down to under 6 billion barrels

New Delhi: The world's emergency oil stock is being depleted very fast. Because of war and supply disruptions, governments and companies have drawn more than 1 billion barrels of oil from their reserves. Global commercial stocks now hold less than 6 billion barrels, of which only 10 per cent or less is available for immediate use.

This means the market has very little room left to absorb a shock. If a fresh supply crisis arises, the oil market could be hit hardest. Upward pressure on prices is already building.

It should be made clear that this concerns emergency oil stocks, not total oil reserves. For now, the world has adequate oil stocks overall. According to the figures, the world consumes about 103 million to 105 million barrels of oil every day.

On a per capita basis, this works out to about 0.53 US gallon a day. Diesel accounts for the largest share of this consumption. According to EIA data, diesel and gasoil make up about 27 to 28 per cent of total demand. It can be called the backbone of the world economy, since heavy machinery, long-haul trucks, cargo ships, farm tractors and public transport all run on it.

Petrol, or motor gasoline, comes second. According to EIA data, it accounts for about 25 per cent of total demand. Petrol is used mostly in private cars, motorcycles and light trucks. Demand growth for petrol has slowed in Western countries as demand for electric vehicles rises, but global demand for petrol remains high.

Diesel and petrol account for about 74 per cent of the net energy used in transport. Products such as residual fuel oil, bitumen and lubricants are used to run large ships, build roads and lubricate engines.

Overall, given the falling emergency stocks and high consumption, fears of a major shortage ahead are being voiced.