The recent US-Iran conflict has once again brought the world's attention to the volatile nature of global oil supplies. While oil reserves played a crucial role in mitigating the impact of the Strait of Hormuz closure, the International Monetary Fund (IMF) warns that these reserves are now 'spent', leaving economies vulnerable to soaring fuel prices. This article delves into the complex interplay between oil reserves, market dynamics, and the potential consequences of a prolonged disruption in oil supply.
The Role of Oil Reserves in Mitigating Shocks
Before the war began, global oil supplies were approximately 2 million barrels per day above demand, acting as a crucial buffer against supply shocks. The IMF highlights that this surplus prevented the global
