Aramco CEO Warns of Dangerously Low Global Oil Stocks

Saudi Aramco CEO Amin Nasser has raised alarm over the critically low levels of global oil buffer stocks, warning that the situation poses significant risks to market stability. Speaking at the Energy Intelligence Forum in London, Nasser highlighted that inventories designed to cushion supply shocks have dwindled to 'dangerously thin' levels. This comes as major economies, including the U.S., have released up to 100 million barrels of emergency oil reserves to mitigate rising fuel costs.

The CEO emphasized that the partial obstruction of the Strait of Hormuz, a key oil transit route, continues to exacerbate supply concerns. Despite efforts by Gulf producers to boost output and reroute exports, the fundamental supply-demand imbalance remains unresolved. Nasser noted that global crude oil consumption is on the rise, and countries will need an additional 2 million barrels per day for at least the next two years to rebuild inventories.

Nasser disclosed that global oil inventories have plummeted from about 10 billion barrels to less than 6 billion, with only 10% of the remaining stock readily available due to technical constraints. While the release of emergency reserves provides temporary relief, it does not address the underlying supply-demand issue. The CEO also pointed out that refined product prices have surged even more dramatically than crude oil prices, adding to market pressures.

The Strait of Hormuz has faced increased security risks since the U.S.-Iran conflict escalated in late February. Although tanker traffic has partially resumed, the market remains cautious, with Brent crude trading around $100 per barrel. Saudi Arabia and other Gulf producers have been using their own tankers to transport crude, but the threat of attacks persists, further complicating the supply situation.