US Crude Oil Inventories Build As Hormuz Shipping Headache Drags On

US commercial crude oil inventories rose last week even as tensions around the Strait of Hormuz continued to unsettle global oil flows, according to figures from the American Petroleum Institute (API).

The industry body estimated that crude stocks increased by around 2.6 million barrels in the week ending 17 July, reversing a modest draw of 564,000 barrels the previous week. Despite this build, commercial inventories excluding the Strategic Petroleum Reserve (SPR) have been drawing down sharply, losing more than 57 million barrels across the past thirteen weeks. However, the year-to-date decline stands at just 7 million barrels, cushioned by continued releases from the SPR.

A further 5.1 million barrels were withdrawn from the SPR over the reporting week, taking the reserve to 316.5 million barrels—its lowest level in more than four decades and roughly 420 million barrels below full capacity. Analysts note the generally accepted operational floor sits between 250 and 300 million barrels, below which efficient extraction becomes difficult.

US crude output edged higher to 13.861 million barrels per day for the week ending 10 July, up 486,000 bpd on a year earlier. Product inventories showed mixed movements: gasoline stocks fell by about 1.4 million barrels and were already running some 8 per cent under the five-year seasonal average, while distillates rose by roughly 1.8 million barrels but remained around 11 per cent below the seasonal norm. Cushing hub stocks dropped by 737,000 barrels.

Prices firmed against this backdrop, with Brent trading near $91 and WTI around $84.50, the latter up roughly $5 on the week as US-Iran friction escalated.

For Malaysian and Southeast Asian maritime and oil and gas readers, the persistent risk around Hormuz carries direct implications. Regional refiners and traders reliant on Gulf crude face growing freight, insurance and rerouting costs, while Asian buyers such as India are already reported to be scaling back Middle Eastern purchases. Firmer benchmark prices support upstream activity and offshore service demand across the region, potentially benefiting Malaysian operators. Tanker owners and charterers, meanwhile, must weigh elevated war-risk premiums and possible diversions that could tighten vessel availability across key Asian trade lanes.