Aramco CEO Warns of Thin Global Oil Buffer as Strait of Hormuz Disruptions Persist
Saudi Aramco CEO Amin Nasser delivered a stark warning at the Energy Intelligence Forum in London on October 5th, highlighting the precarious state of global oil inventories. He described the current supply buffer as "frighteningly thin," following disruptions in the Strait of Hormuz, a critical waterway for 20% of global crude and LNG shipments. Since late February, Iran has blockaded the strait after U.S. and Israeli military strikes, leading to a cumulative loss of nearly 3 billion barrels of crude supply. Nasser emphasized that replenishing these inventories could take up to two years, even if the strait reopens immediately.
Nasser revealed that 90% of the roughly 6 billion barrels in global reserves are either inside pipelines or required to keep storage tanks operational, making them "effectively not available for immediate use." He stressed that the remaining reserves are commercial holdings, the last major tool to bridge supply gaps. To replenish inventories over the next 18 months, an additional 2 million barrels per day of demand would be necessary. "The entire energy system is stretched to its limits," Nasser stated, warning of persistent price pressure on crude and refined products until the Strait of Hormuz reopens and market confidence is restored.
In response to the crisis, Saudi Arabia is diversifying export routes to avoid reliance on the Strait of Hormuz. Nasser disclosed that the East-West Pipeline to Red Sea ports has helped prevent Brent Crude futures from surpassing $200 per barrel. Saudi Aramco has also increased crude loadings from Ras Tanura, its primary export terminal, though market tightness persists. Despite a rebound in crude shipments from Persian Gulf countries to 15.5 million barrels per day, Brent Crude has held around $100 per barrel, while physical North Sea crude spot prices have surged to their highest level since April.
Nasser also criticized the misuse of modern technology, such as satellite imagery and shipping records, to target energy infrastructure. He condemned these tools becoming "ammunition for aggression," citing recent attacks on tankers and Saudi Aramco facilities. While Aramco has demonstrated resilience, Nasser's remarks underscored the narrowing safety margin of the global energy system and the lengthy recovery ahead.