Aramco CEO Warns Oil Inventories Are ‘Scarily Thin’

Saudi Aramco’s chief executive Amin Nasser told the Energy Intelligence Forum in London that nearly 3 billion barrels of gross oil supply have been lost since the Iran war began, a shortfall he equated to roughly half the volume that would normally transit the Strait of Hormuz over the same period. He said the world entered the crisis with nearly 10 billion barrels of oil stocks, but more than 1 billion barrels have been withdrawn from inventories to offset supply disruptions. Nasser said most of the withdrawals came from onshore commercial stocks, leaving under 6 billion barrels in commercial inventories and noting that the bulk of those remaining stocks are not practically available to the market. "The system is already straining," he said, adding that the supply cushion is "scarily thin." He warned that Brent crude could have reached $200 per barrel if Saudi Arabia’s East-West pipeline had not allowed the kingdom to reroute crude from eastern fields to the Red Sea and bypass the Strait of Hormuz. Aramco has restored flows on that route to about 80% of capacity following an attack last month, The National reported. Nasser said replenishing global inventories while continuing to meet demand could take as long as two years even after the Strait of Hormuz fully reopens. His remarks came as the G7 announced plans to release up to 100 million barrels of emergency oil and diesel stocks over the next four months, and after IEA members had already released around 325 million barrels of the 400 million pledged in March. Aramco is also studying additional crude export routes and expanded overseas storage, and Nasser said the company can make its full 12 million barrels-per-day of sustainable production capacity available within days.