Global Oil Stockpiles Depleted to Dangerous Low as Markets Face Turmoil

Global oil inventories are rapidly depleting, leaving the market vulnerable to supply shocks and price volatility, according to industry executives. At the Energy Intelligence Forum in London, Saudi Aramco CEO Amin Nasser warned that less than 6 billion barrels of commercial oil inventories remain, with most of it unavailable for immediate use. Since the start of the Middle East crisis this year, over 1 billion barrels have been drawn from stockpiles, exhausting a key buffer against supply disruptions.

The International Energy Agency (IEA) is preparing to release an additional 100 million barrels of crude and diesel to ease soaring diesel prices, though the availability of these reserves remains uncertain. Chevron CEO Mike Wirth noted that the loss of these buffers has increased the price floor for oil, making the market more fragile. Executives predict that oil market turmoil will persist beyond next year as inventories take years to replenish while demand continues to grow.

Operational and political factors further limit the usability of stored oil, including tank bottoms, pipeline constraints, and government-imposed minimum stock levels. Kuwait Petroleum Corporation CEO Shaikh Nawaf Al-Sabah announced plans to expand storage domestically and at overseas refineries to meet rising demand. Meanwhile, Vitol CEO Russell Hardy emphasized the world's reliance on seaborne oil exports from the Middle East to maintain balance, especially as winter approaches.

The U.S. Strategic Petroleum Reserve is at its lowest level since 1982, while natural gas inventories are also depleted, raising concerns about price spikes. Petronas CEO Tengku Muhammad Taufik cautioned that a severe winter could lead to a 'bloodbath' in the gas market if storage levels drop to minimal levels.