The chief executive of Saudi Aramco has warned that global oil stockpiles have reached dangerously low levels following seven months of conflict involving the US, Israel and Iran, and that restoring them will take years rather than months.
Speaking at the Energy Intelligence Forum conference in London, Amin Nasser said the war had reduced oil supply from the region by “nearly 3bn barrels,” equivalent to roughly half the crude and refined fuels that would have transited the Strait of Hormuz over the same period. More than 1bn barrels have since been drawn from reserves to cushion the shortfall.
Governments have released over 300mn barrels from strategic reserves and agreed on Friday to release more. But Nasser said the bulk of drawdowns have come from company-held commercial stocks, which he described as “the last major tool in the box.” He estimated that “less than 6bn barrels of commercial inventories remain today, with the vast majority not practically available.”
“The system is already straining,” he told the conference. “And with precious little else the world can turn to, the supply resilience cushion is scarily thin.”
It was Nasser’s first public speech since the conflict began. He said that even after hostilities end, “replenishing inventories while meeting demand could take up to two years,” and called on governments to prioritise energy security and resilience.
The warnings come as a makeshift system of rerouting shipments through the Strait of Hormuz has begun to partially restore flows. Gulf exports rose to 15.5mn barrels a day last month, the highest since the war started and more than 80 per cent of pre-conflict volumes, according to data provider Kpler. But the cost of those shipments has been steep, and physical crude markets remain extremely tight. North Sea cargo prices for delivery this month climbed to their highest level since April.
Iran has continued to strike ships moving through Hormuz, while its proxies in Iraq and Yemen have attacked Aramco’s pipelines, refineries and ports. Nasser also raised concern about the use of open-source data, including satellite imagery and shipping logs, to target energy infrastructure. “Tools of transparency should not become ammunition for aggression,” he said.
Aramco is studying additional export routes for Saudi crude and exploring overseas storage facilities to better protect customers from future disruptions, he added.
