– This is the script of CNBC's financial news report for China's CCTV on May 26, 2026.
Overnight, optimism grew in the market that the U.S. and Iran could potentially reach an agreement, helping push oil prices lower. But speaking to CNBC, veteran commodities analyst Jeff Currie cautioned that while markets may adjust positions in the short term based on political rhetoric, the key issue ultimately comes down to one thing: whether there is enough actual oil supply available.
Currie noted that as the conflict drags on, global oil inventories continue to decline. In just the past week alone, inventories fell by roughly 17 million barrels. He argued that the longer the situation persists, the stronger Iran's negotiating leverage may become, while the West's room for negotiation could narrow further.
He also warned that while global oil inventories appear to stand at around 8 billion barrels on paper, a significant portion of that consists of pipeline fill and operational inventories required to keep systems running, meaning those barrels are not truly available to the market. As a result, inventories cannot decline indefinitely, because there is what he calls a "minimum operating level." In his view, Asian markets are already approaching that threshold.
And in Asia, supply pressure is not only showing up in the crude market itself, but is also spreading to a key downstream feedstock refined from crude oil: naphtha. Naphtha is a foundational raw material for many chemical products, which is why some compare it to the "flour" or "rice" of the industrial sector.
According to Oxford Economics, Japan and South Korea are among the countries most heavily affected by the current supply shortage.
In South Korea, the naphtha shortage has already begun rippling through the petrochemical supply chain. A report by The New York Times says some of the country's petrochemical giants have been forced to significantly cut operating rates. Some chemical producers have also been unable to fulfill delivery contracts with major automakers and electronics manufacturers because of insufficient feedstock supplies, and have declared related shipments subject to "force majeure." Analysts have also suggested that South Korea's semiconductor industry has been affected by the naphtha shortage.
Meanwhile, concerns over shortages are also beginning to affect consumers. Some South Korean companies, lacking sufficient naphtha feedstock, have been unable to maintain normal production of chemicals used to manufacture plastics. Reports say some consumers in South Korea have already started stockpiling everyday items such as plastic bags.
To cope with the shortage, South Korea has reportedly increased imports of naphtha from Russia.
And finally, back to the broader macro picture. Jeff Currie expects supply pressures in the oil market could gradually spread from Asia to Europe and the United States. He noted that Europe currently appears relatively stable largely because, after the U.S. released oil from its Strategic Petroleum Reserve, some of those barrels flowed into the European market. But he stressed that this kind of external supply support is not sustainable.
Jeff Currie
Executive Co-Chairman
Abaxx Markets
"The next one would be Europe. We expect Europe to start to have problems sometime, you know, after this bank holiday, as we get into the summer driving season. … So I would say, you know, Asia, you're there. Europe, you know, give it about another month. And look for July being a problem in the U.S."