The world's oil stockpiles are now 'scarily thin', the chief executive of Saudi Aramco said, adding that it would take up to two years to rebuild inventories depleted during the Middle East conflict. Amin Nasser said the seven-month war between the US, Israel and Iran had reduced oil supply from the region by 'nearly 3bn barrels', equivalent to roughly half the crude oil and refined fuels that would have passed through the Strait of Hormuz over that period. More than 1bn barrels of oil have been drawn from reserves to try to cushion the shortfall, Nasser added. Governments have released more than 300mn barrels from strategic reserves and agreed on Friday to release more, but Nasser said the majority that have been deployed have come from the reserves of companies, which held 'the last major tool in the box'.
In his first public speech since the war began, the boss of the state-run Saudi Arabian company said 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 Energy Intelligence Forum conference in London. 'And with precious little else the world can turn to, the supply resilience cushion is scarily thin.' He added that modern technology, including 'open data such as satellite imagery and shipping logs', was 'increasingly being weaponised against infrastructure and tankers'.
Iran has hit ships moving through the Strait of Hormuz while its proxies in Iraq and Yemen have attacked Aramco's pipelines, refineries and ports. 'Tools of transparency should not become ammunition for aggression,' Nasser said. Shipments from Gulf countries rose to 15.5mn barrels a day last month, the highest level since the war began and more than 80 per cent of the pre-conflict volume. However, oil markets remain extremely tight, with prices for physical North Sea crude cargoes to be delivered this month rising to their highest levels since April. Nasser said that even at the end of the conflict, 'replenishing inventories while meeting demand could take up to two years', and called on governments to focus more on energy security and resilience. Aramco was studying additional routes for exporting Saudi crude and exploring further overseas storage facilities to help protect customers against future disruptions, he said.
Source: Financial Times Companies · Summarized by HeadlinesBriefing