Saudi Aramco chief executive Amin Nasser says global oil inventories have become "scarily thin" after the seven-month Middle East war cut regional supply by nearly three billion barrels. He estimates rebuilding stocks could take up to two years even after the conflict ends, as governments and companies draw down reserves to offset the shortfall.
Aramco's chief executive put a number on the damage the Middle East war has done to the world's oil cushion. Amin Nasser told the Energy Intelligence Forum in London that the seven-month war between the US, Israel and Iran cut oil supply from the region by nearly 3bn barrels, roughly half the crude and refined fuel that would otherwise have moved through the Strait of Hormuz over that span.
Reserves drawn down on multiple fronts
More than 1bn barrels have been drawn from reserves to cushion the shortfall, Nasser said. Governments have released over 300mn barrels from strategic stocks and agreed on Friday to release more, but he said most of the barrels deployed so far have come from company reserves, which he described as the last major tool available.
In his first public speech since the war began, Nasser estimated that less than 6bn barrels of commercial inventories remain today, with the vast majority not practically available. According to the Financial Times: "the supply resilience cushion is scarily thin."
Infrastructure under attack
Nasser also warned that modern technology, including satellite imagery and shipping logs, is increasingly being weaponised against infrastructure and tankers. Iran has hit ships moving through the Strait of Hormuz, he noted, while its proxies in Iraq and Yemen have attacked Aramco's pipelines, refineries and ports.
Even so, shipping is recovering. Shipments from Gulf countries rose to 15.5mn barrels a day last month, the highest level since the war began and more than 80% of the pre-conflict volume, according to data provider Kpler. However, these shipments have been hugely expensive, and oil markets remain extremely tight. Physical North Sea crude cargoes for delivery this month have risen to their highest levels since April.
Nasser said that even once the conflict ends, replenishing inventories while meeting demand could take up to two years, and he called on governments to focus more on energy security and resilience. Aramco is studying additional export routes for Saudi crude and exploring further overseas storage to protect customers against future disruptions.
Source: Energy sector
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