Aramco CEO Warns of Two-Year Wait to Restock Global Oil Supplies

The global oil supply crisis is expected to worsen, with replenishing crude and fuel stockpiles potentially taking up to two years, according to Amin Nasser, CEO of Saudi Aramco. The strain on supplies has intensified since the start of the US-Israeli war on Iran in late February, which led to the closure of the Strait of Hormuz, a critical shipping route. The Group of Seven countries recently agreed to release 100 million barrels of oil from emergency reserves, but Nasser warned that restoring inventories while meeting demand will be a lengthy process.

Since the conflict began, the world has lost nearly 3 billion barrels of oil supply, while 1 billion barrels have been released from global stocks. Nasser noted that replenishing these inventories would require an additional 2 million barrels per day of demand over the next 18 months. Global daily oil demand currently stands at just over 100 million barrels per day.

Saudi Arabia, with a maximum sustainable production capacity of 12 million barrels per day, has strategic reserves and flexibility to help mitigate supply pressures. However, Nasser highlighted that much of the remaining 6 billion barrels in storage is not practically available, as up to 90% is either in pipelines or needed to maintain storage tank operations.

To address supply disruptions, Saudi Aramco is exploring new export routes and increasing overseas storage. The East-West pipeline, which allows oil to be moved to Red Sea terminals, has remained operational despite reports of disruptions. Nasser also mentioned the possibility of expanding the pipeline’s capacity and developing additional export routes to reduce reliance on the Strait of Hormuz.