Saudi Aramco CEO Warns of Dangerously Low Global Oil Reserves
Translated & summarized from Srugim by baba
The story in 5 lines · by baba
- Global oil reserves are "frighteningly thin," warns Saudi Aramco CEO Amin Nasser.
- Nearly 3 billion barrels of oil have been removed from the market since the conflict began.
- Replenishing oil reserves to meet demand could take up to two years.
- Current global oil stockpiles are considered not practically available.
- Rising refined fuel prices are outpacing crude oil price increases.
Global oil reserves, crucial for buffering the world economy against supply shocks, have dwindled to a "frighteningly thin" level, according to Amin Nasser, CEO of Saudi Aramco. Speaking at the Energy Intelligence Forum in London, Nasser stated that until the Strait of Hormuz is fully reopened and security is restored, pressure on oil supplies will intensify. He cautioned that replenishing these reserves to meet demand could take up to two years.
Nasser reported that approximately 3 billion barrels of oil have been removed from the market since the conflict began, representing about half of the crude oil and fuels typically transported through the Strait of Hormuz during such periods. Of this amount, roughly 1 billion barrels came from commercial and other reserves. He further noted that the approximately 6 billion barrels still in storage globally are not practically available. Additionally, Nasser observed that refined fuel prices have risen faster than crude oil prices.
These remarks follow announcements from major global economies that they would release up to 100 million barrels of oil and diesel from emergency stockpiles to curb rising fuel costs. Nasser acknowledged this measure would provide temporary relief but would not resolve the fundamental gap between supply and demand.
While oil exports from the Persian Gulf have largely returned to pre-conflict levels, with Saudi Arabia, the UAE, and Kuwait rerouting oil via their own tankers, the price of Brent crude has remained around $100 per barrel. This is attributed to ongoing market concerns over security risks in the Persian Gulf and the Red Sea. Saudi Aramco has increased shipments from its Ras Tanura terminal, and the East-West pipeline is operating at about 80% capacity, allowing more oil to be sent through the Red Sea.
Nasser highlighted that Aramco has maintained stable supply by utilizing overseas storage and rapidly repairing damaged infrastructure. The company is now exploring additional export routes and overseas storage options to reduce reliance on a single supply path to its customers.