Aramco CEO warns of dangerously thin oil stockpiles
Saudi Aramco (ARMCO) CEO Amin Nasser warned that global oil stockpiles have reached dangerously low levels and could take up to two years to rebuild, even after the Strait of Hormuz fully reopens. Speaking at the Energy Intelligence Forum in London, Nasser emphasized that the current situation will intensify pressure on both supply and demand. Nearly 3 billion barrels of oil supply have been lost since the start of the Iran war, with 1 billion barrels released from global stocks to mitigate shortages.
Nasser acknowledged the G7 governments' plan to release up to 100 million barrels of emergency oil and diesel stocks, but he cautioned that this measure will only provide temporary relief. The underlying supply-demand imbalances will persist, requiring significant time to correct. Aramco has managed to maintain resilient oil supplies by utilizing international storage and repairing damaged infrastructure swiftly.
The company reportedly increased supplies through the 7 million barrel per day East-West pipeline to over 80% of capacity following a recent drone attack. Nasser noted that without this critical pipeline, which allows Saudi Arabia to bypass the Strait of Hormuz, Brent crude futures could have surged to $200 per barrel. On Monday, front-month Nymex crude for November delivery fell 1.5% to $89.73 per barrel, while front-month Brent crude for December delivery dropped 0.7% to $101.50 per barrel.