Aramco Warns of Dangerously Low Global Oil Inventories

Saudi Aramco CEO Amin Nasser has raised concerns about critically low global oil inventories, warning that the Iran war has significantly depleted stocks meant to cushion against supply disruptions. Speaking at the Energy Intelligence Forum in London, Nasser highlighted that the effective closure of the Strait of Hormuz, a key waterway handling 20% of the world’s oil and gas, has led to major supply disruptions and soaring prices, straining the global economy.

The G7 countries and the International Energy Agency (IEA) agreed to release 100 million barrels of diesel and crude oil to ease supply concerns, but Nasser cautioned that total oil inventories do not reflect actual market availability. He noted that less than 10% of reported reserves are usable, with much of the remaining stock tied up in operational infrastructure.

Global oil inventories, which stood at around 10 billion barrels at the start of the crisis, have lost nearly 3 billion barrels due to the conflict. Over 1 billion barrels have been withdrawn from inventories to offset losses, leaving less than 6 billion barrels, much of which is not practically available. Nasser emphasized that these reserves only provide a temporary fix and warned that rebuilding them could take up to two years once the Strait of Hormuz reopens.

Despite challenges, regional oil exports have recovered, with September’s exports matching pre-war levels, according to maritime tracking firm Kpler. Some 40% of exports now bypass the Strait of Hormuz, using alternative routes like pipelines in Saudi Arabia and the UAE. Aramco has also been working to meet customer demands by utilizing international storage facilities and repairing damaged infrastructure.