Saudi Aramco Warns of Critical Global Oil Inventory Shortage

Amin Nasser, CEO of Saudi Arabia's state oil company, warned at the Energy Intelligence Forum in London that global oil storage levels have dropped to critically low levels, increasing market fragility and driving prices higher. He noted that only 6 billion barrels of commercial inventories remain available, with most of them not practically accessible, leaving the system under strain.

Governments and energy companies have been drawing down oil stockpiles throughout the year to mitigate supply disruptions caused by conflicts in the Middle East and Ukraine. Nasser revealed that over 1 billion barrels of oil have been released from onshore commercial inventories since the start of the Middle East crisis, describing it as the last major tool available to manage market pressures.

The International Energy Agency (IEA) is preparing to release an additional 100 million barrels of crude and diesel to combat rising diesel prices. Nasser acknowledged the effort, stating, "It took a lot of negotiations, but it is 100 million." He emphasized that inventories are reaching a stress level, with only 10% or less of the oil practically available, making it challenging to manage the current market conditions.

With global oil demand standing at about 102 million barrels per day, Nasser highlighted a substantial global demand to build additional inventories, underscoring the need for strategic planning to address future supply challenges.