Reserves that averted a 'full-blown' oil shock are running low, IMF says

The International Monetary Fund said the global economy was spared the worst of a recent oil price shock thanks to large strategic reserves built up in recent years. The fund said those reserves acted as a buffer against the supply disruption risk triggered by US-Iran tensions.

However, IMF officials stressed that the reserves have now been significantly drawn down, a development that could weaken the world's capacity to absorb a similar shock in the future. Depleted reserves raise the risk that oil price swings will pass through more directly to consumers and industry.

The assessment comes as tensions between the US and Iran persist around the Strait of Hormuz. Economists say the global economy could become more vulnerable to future supply shocks if the reserves are not replenished.