Saudi Aramco CEO Says Replenishing Oil Stocks Could Take Two Years

The global oil supply crisis may persist for up to two years as the world struggles to replenish stockpiles depleted during the conflict between the US, Israel, and Iran. Amin Nasser, CEO of Saudi Aramco, warned that refilling inventories while meeting demand will require an extra 2 million barrels per day over the next 18 months. The conflict, which began in February, has led to the loss of nearly 3 billion barrels of oil supply and the release of 1 billion barrels from global stocks.

Nasser highlighted that the closure of the Strait of Hormuz, a critical shipping route, has exacerbated the supply pressure. He noted that even if the strait reopens, restoring oil inventories will be a lengthy process. Saudi Arabia, with its maximum sustainable production capacity of 12 million barrels per day (bpd), is well-positioned to help mitigate the crisis, though much of the remaining 6 billion barrels in storage is not readily available.

To bypass the Strait of Hormuz, Saudi Aramco is exploring new export routes and utilizing more overseas storage. The East-West pipeline, which allows oil to be moved to 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.

Nasser assured that Aramco is meeting customer requirements and is working on additional export routes to reduce the risk of a single chokepoint paralyzing the system. The company's strategic reserves and flexibility have remained intact, providing a buffer against short-term disruptions.