Aramco Chief: Global Oil Stockpiles Down to Dangerously Thin Levels

Summary

• Aramco CEO Amin Nasser said global oil inventories are now dangerously thin after the Middle East war
• He estimated regional supply fell by nearly 3 billion barrels over seven months of conflict
• Rebuilding stockpiles while meeting demand could take up to two years, he said

The latest

Global commercial oil inventories have fallen below 6 billion barrels, with most of that volume not practically available, Saudi Aramco chief executive Amin Nasser said in his first public speech since the war began. He told the Energy Intelligence Forum in London that the system is already straining and the world's supply cushion has grown dangerously thin.

Details

• The supply loss: Nasser said the seven-month war between the United States, Israel and Iran cut oil supply from the region by nearly 3 billion barrels, roughly half the crude and refined fuels that would normally have moved through the Strait of Hormuz over the same period.
• The drawdown: More than 1 billion barrels have been pulled from reserves to cushion the shortfall, Nasser said. Governments released over 300 million barrels from strategic stocks and agreed on Friday to release more, but he said the bulk of deployed barrels came from company-held reserves.
• The last tool: Nasser described commercial inventories held by companies as the last major tool in the box, a framing that places the remaining buffer outside direct government control. He did not specify which companies have drawn down the most or how much capacity each retains.
• The timeline: Even once the conflict ends, replenishing inventories while simultaneously meeting demand could take up to two years, Nasser said. He urged governments to shift focus toward energy security and resilience rather than treating current flows as a return to normal.
• The attacks: Iran has struck ships transiting the Strait of Hormuz in recent weeks, while its proxies in Iraq and Yemen have attacked Aramco pipelines, refineries and ports. An Aramco facility was pictured burning on October 3.
• The warning on data: Nasser said open data including satellite imagery and shipping logs is increasingly being weaponised against infrastructure and tankers. "Tools of transparency should not become ammunition for aggression," he said, without naming which actors he was accusing.
• The flows: Shipments from Gulf countries rose to 15.5 million barrels a day last month, the highest level since the war began and more than 80 percent of pre-conflict volume, according to data provider Kpler. A complicated system of shuttling oil through Hormuz is helping restore those flows.
• The price signal: Those shipments have been hugely expensive and markets remain extremely tight, with physical North Sea crude cargoes for delivery this month pricing at their highest levels since April.
• Aramco's response: The company is studying additional routes for exporting Saudi crude and exploring further overseas storage facilities to shield customers from future disruption, Nasser said. He gave no timetable or cost for either plan, and named no partner countries.

Background

The Strait of Hormuz is the chokepoint for a large share of Gulf crude and refined fuel exports. Attacks on shipping and on Saudi energy infrastructure during the seven-month war disrupted that route, forcing producers and buyers into costlier workarounds.

Between the lines

Nasser's numbers describe a market that looks stable on volume but not on buffer. Gulf shipments have recovered past 80 percent of pre-war levels, yet he puts usable commercial inventories at a fraction of the headline 6 billion barrels and says government strategic stocks are no longer doing most of the work. On that reading, restored flows mask a system with little left to absorb the next disruption.

What's next

Watch the volume of the additional strategic reserve release agreed Friday, Kpler's next monthly Gulf shipment figures, and whether North Sea physical cargo prices hold above April highs.

Source: Financial Times, Kpler