Aramco CEO warns of two-year wait to rebuild thin global oil inventories

Aramco CEO Amin Nasser has cautioned that replenishing global oil inventories could take up to two years, even after the Strait of Hormuz fully reopens. Speaking at the Energy Intelligence Forum in London, Nasser described current stockpiles as "scarily thin," with less than 10% of global oil inventories practically available. Since the Iran conflict began, approximately 3 billion barrels of supply have been lost, and over 1 billion barrels have been drawn from stockpiles to offset the gap. Nasser estimates the world will need an additional 2 million barrels per day for 18 months to restore inventories while meeting ongoing demand.

Despite shipping through Hormuz improving, Nasser warned that damage to Middle East refining infrastructure continues to limit crude processing, pushing fuel prices higher than crude. Chinese refiners have also suspended fuel exports to secure domestic supplies. While Aramco says it can produce 12 million barrels per day if needed, Nasser called for better cooperation between producers and consumers to enhance emergency planning, emphasizing oil's central role in energy security.

Oil prices dipped slightly on Monday, reflecting traders' focus on improved Hormuz shipping and near-prewar output levels. However, Nasser's warning about thin inventories highlights the market's vulnerability to price spikes from any new disruptions. The tight market conditions also challenge futures curves that predict a return to normal next year, with refined products facing more acute pressure due to regional refining capacity issues and halted Chinese fuel exports.