Saudi Aramco Warns Oil Stockpile Replenishment Could Take Two Years

The global oil supply crisis is expected to worsen, with Saudi Aramco CEO Amin Nasser warning that replenishing crude and fuel stockpiles could take up to two years. Speaking at the Energy Intelligence Forum in London, Nasser noted that the conflict in the Middle East, particularly the closure of the Strait of Hormuz, has severely disrupted oil exports. He emphasized that even after the strait reopens, restoring inventories while meeting demand will be a lengthy process.

Since the start of the US-Israeli war on Iran in February, nearly 3 billion barrels of oil supply have been lost, while 1 billion barrels have been released from global stocks. Nasser stated that refilling these inventories would require an additional 2 million barrels per day of demand over the next 18 months. Global daily oil demand currently stands at just over 100 million barrels per day.

Saudi Arabia, with a maximum sustainable production capacity of 12 million barrels per day, has the capability to ramp up production quickly. However, Nasser pointed out that much of the remaining 6 billion barrels in storage is not practically available, as it is either in pipelines or needed to maintain minimum storage tank volumes. To mitigate supply pressure, Saudi Aramco is exploring new export routes and increasing overseas storage to cover short-term disruptions.

The East-West pipeline, which allows Saudi Arabia to move oil to its Red Sea terminals, has remained operational despite recent hostilities. Nasser highlighted that without this pipeline, Brent crude futures could have surged to $200 per barrel. As of Monday, Brent futures were trading around $102 per barrel, down from a high of $126 per barrel in late April.