Aramco CEO says only 10% of global oil inventory is available
Saudi Aramco Chief Executive Amin Nasser has indicated that less than 10 percent of the world’s oil inventories are presently practically available, cautioning that the strain on crude and refined fuel supplies may intensify until the Strait of Hormuz is completely reopened and market confidence is restored. The world has entered the current crisis with nearly 10 billion barrels of oil in stocks, Nasser stated at the Energy Intelligence Forum in London on Monday. “Less than 6 billion barrels of commercial inventories remain, with most of that volume not practically available,” he was quoted as saying by source. He noted that over 1 billion barrels from those reserves have already been utilised to compensate for diminished oil supplies. Most of the oil has originated from onshore commercial inventories, which Nasser characterised as the “last major tool in the box”.
Governments in several of the world’s largest economies have unveiled intentions to release up to 100 million barrels of emergency oil and diesel reserves to alleviate pressure on fuel markets, as reported. Nasser indicated that these emergency reserves might offer temporary relief; however, they will not address the underlying supply-demand imbalance. “Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify,” Nasser said. “While the squeeze on crude is serious, refined fuel prices have risen even more sharply.” Nasser indicated that the process of replenishing global inventories while simultaneously satisfying demand could extend for as long as two years, even following the reopening of the Strait of Hormuz. “The world needs at least 2 million bpd of extra demand to refill current inventories for the next 18 months,” Nasser said. He also stated that crude oil demand may sustain stability over the next two years, provided that conditions normalise.
The Strait of Hormuz has experienced partial obstruction following the military actions undertaken by the US and Israel against Iran at the conclusion of February. Gulf producers have ramped up both production and exports, as Saudi Arabia, the United Arab Emirates, and Kuwait deploy their own tankers to facilitate the transportation of crude through the waterway. The increased flows have offered only marginal respite to oil markets, which persist in factoring in supply risks emanating from the Persian Gulf and the Red Sea. Brent crude has maintained a trading level of approximately $100 per barrel throughout the past month. Saudi Aramco has raised crude shipments from its primary export terminal at Ras Tanura in the Persian Gulf during the last month. The company has successfully reinstated operations on its East-West pipeline, achieving approximately 80 percent of its capacity following a temporary cessation due to an attack.
The restoration provides Aramco with an increased volume of oil that can be exported from the Red Sea. Nasser indicated that Aramco is evaluating supplementary export pathways and international storage options to mitigate reliance on specific routes to global markets. “We are working on fourth, fifth export routes, including engineering,” Nasser said. The company is also using ship-to-ship transfers, he said, as reported. According to Nasser, Aramco has depended on international storage solutions and swift repairs to its damaged infrastructure in order to sustain oil supplies amid the ongoing conflict. He also stated that the company could make 12 million barrels per day available within days if required.
