Global oil inventories fall to 37 days as market reprices war risk

A new market reality is setting in as investors pivot from AI-driven certainty to the hard constraints of energy supply, with a Guojin Securities report highlighting just 37 days of global oil inventory remaining.

The report from late April 2026 argues that while global equity markets have largely recovered to pre-conflict levels, the underlying risk in the energy sector has been mispriced. The probability of a U.S.-Iran peace deal by the end of May has collapsed from a high of 74 percent on April 17 to just 35 percent, according to data from Polymarket. This sharp reversal in sentiment follows a week where Brent crude futures surged 17.15 percent and WTI crude jumped 14.88 percent.

"The market must eventually recognize the upward shift in the center of energy prices," a Guojin Securities strategist said in the report. This shift, the firm argues, creates significant opportunities in China's traditional and new energy sectors, as well as its manufacturing base, which benefits from a more stable energy supply.

The repricing of risk is already visible in supply chain data. In the Eurozone, purchasing managers’ index (PMI) data for April showed that supplier delivery times have extended to their longest since mid-2022, with input costs rising at the fastest pace since the end of that year. This indicates that the near-interruption of Middle Eastern oil supply is beginning to bite into industrial production, even as some regions like Southeast Asia have reduced demand.

AI Certainty Premium Fades

The initial market reaction to the conflict saw investors crowd into AI-related hardware stocks, viewing them as a haven of certainty. The logic held that U.S. technology demand was the least affected by the disruption, and China's manufacturing supply chain was the most stable. This created a powerful combination of a macroeconomic certainty premium and a strong industrial trend for sectors like optical modules and PCBs.

However, that trade is showing signs of fatigue. According to the Guojin report, the window for high-growth earnings in technology may be closing as some key companies begin to report results below market expectations, leading to performance divergence within the sector. As the market's patience with protracted U.S.-Iran negotiations wears thin, the focus is shifting to the unavoidable reality of dwindling energy stockpiles.

China's Manufacturing Advantage Solidifies

The upward shift in the global energy price center presents a strategic opportunity for China, the report contends. With its stable and comparatively lower-cost energy infrastructure, China is positioned to become a global manufacturing anchor. This is reflected in March export data, which showed continued growth in basic organic chemicals and lithium-ion batteries, while exports of products like electrical transformers remained high.

The trend benefits both old and new energy in China. Traditional energy sources like coal and oil are set for a "quantity and price increase" as they serve as a stabilizing force for energy security. Simultaneously, the crisis is expected to accelerate the global transition to renewables, where Chinese manufacturers have a dominant production capacity. European demand for new energy vehicles, for instance, saw a significant rebound in March. This dynamic, driven by trade flows in energy and manufacturing, is also likely to accelerate the internationalization of the yuan.

This article is for informational purposes only and does not constitute investment advice.