Aramco CEO Warns of Two-Year Wait to Restore Global Oil Stocks

The world’s largest oil company, Saudi Aramco, warns that replenishing global crude oil and fuel stocks could take up to two years. The chief executive, Amin Nasser, made this statement at the Energy Intelligence Forum in London, emphasizing the strain on global energy supplies due to the ongoing conflict in the Middle East.

Since the start of the war between the US-Israeli coalition and Iran in February, the closure of the Strait of Hormuz has severely disrupted oil exports. The Group of Seven countries recently agreed to release 100 million barrels of diesel and crude oil from emergency reserves to ease the pressure. However, Nasser cautioned that restoring inventories while meeting demand would require an additional 2 million barrels per day over the next 18 months.

Nearly 3 billion barrels of oil supply have been lost since the conflict began, while 1 billion barrels have been released from global stocks. Nasser highlighted that much of the remaining 6 billion barrels in storage is not practically available, as up to 90% is tied up in pipelines or required for operational purposes. Despite these challenges, Saudi Arabia’s maximum sustainable production capacity of 12 million barrels per day (bpd) remains intact and can be made available within days.

To mitigate supply disruptions, Aramco is exploring new export routes and utilizing more overseas storage. The East-West pipeline, which allows Saudi Arabia to move oil to its Red Sea terminals, has been crucial in maintaining oil flows. Without this pipeline, Brent crude futures could have surged to $200 per barrel. Currently, Brent futures are trading around $102 per barrel, down from a high of $126 per barrel in late April.