
Global Oil Inventories Cushion Shock as Attacks Hit Russian Refining
J.P. Morgan analysis details inventory buffers while Ukrainian drone strikes target key Russian refineries, factors critical to Bakken crude pricing.
Global crude and product inventories are serving as the primary shock absorber for an oil market roiled by conflict, a dynamic that directly influences the price environment for Bakken producers, according to a new analysis from J.P. Morgan. The report, detailed by Rigzone on Friday, states that with spare production capacity difficult to mobilize, the immediate adjustment to supply losses "has to come from barrels already in storage."
Analysts led by Natasha Kaneva noted the world began 2026 with an estimated 8.4 billion barrels in global storage, a relatively healthy position built from rebuilding stocks in 2024 and 2025. Of that total, about 5.2 billion barrels are crude oil, with 3.2 billion barrels being refined products. However, the report warns that not every barrel is readily accessible. J.P. Morgan estimates only 800 million barrels are realistically available without pushing the system into operational stress, with roughly 280 million barrels already drawn down as of April 23 to cushion the impact of ongoing conflict.
"On paper, that still suggests comfortable buffers. In practice, the picture is more complicated," the analysts revealed in the report. They noted that while floating storage can be tapped quickly, only about 580 million barrels of onshore inventories are readily accessible. The transparency of these buffers also varies, with OECD stocks playing an outsized role in price formation due to timely data publication.
The importance of these global inventory levels as a price-setting mechanism comes as new supply disruptions are reported. In a separate report from Rigzone, Ukrainian drone strikes targeted major Russian refining assets on Friday. A strike damaged the key primary processing unit at Lukoil PJSC's Perm refinery, a facility with a capacity of approximately 260,000 barrels per day, "essentially putting the unit out of action," according to Ukraine's SBU security service.
A nearby oil-pumping station, part of Transneft PJSC's network that brings Siberian crude to central Russia and onward, was also damaged. Ukraine's General Staff also claimed a separate attack on the 120,000-barrel-per-day Orsk refinery. These attacks are part of a Ukrainian campaign targeting Russia's oil assets to reduce Kremlin revenue, which has pushed Russian average daily oil processing rates to their lowest since early 2022.
For Bakken operators and North Dakota royalty owners, these intertwined factors—the draw on finite global inventory buffers and continued attacks on competitor nation refining capacity—create a volatile pricing backdrop. The availability of stored crude to meet demand, particularly the accessible portion highlighted by J.P. Morgan, will be a critical variable in determining the floor for Williston Basin crude prices. Simultaneously, any sustained reduction in Russian refined product output could tighten global fuel supplies, influencing the crack spreads that ultimately affect the value of Bakken crude.
Source
Analysis from J.P. Morgan reported by Rigzone; Reporting on Ukrainian drone strikes from Bloomberg via Rigzone.


