Full Breakdown
Aramco CEO Warns Global Oil Inventories May Need Two Years to Rebuild
By Drooid · · How we work
Core Event
On October 5 (scheduled), Saudi Aramco chief executive Amin Nasser is slated to address the Energy Intelligence conference in London. He warned that, even after the Strait of Hormuz fully reopens, restoring global crude and refined-product inventories could take up to two years. Nasser said the “system is already straining,” underscoring the thinness of the world’s oil-supply buffer.
Background & Context
The U.S.–Israel military strikes on Iran earlier this year have severely disrupted shipping through the Strait of Hormuz, a narrow waterway that normally carries roughly 20 percent of global oil and liquefied natural gas supplies. The blockage has sent shock waves through energy markets, prompting major economies to tap emergency reserves.
Data & Statistics
- Losses: Nasser estimated that almost 3 billion barrels of oil supply have been lost since the conflict began.
- Release from Stocks: About 1 billion barrels have been drawn from commercial inventories to offset the shortfall.
- Unavailable Reserves: The remaining approximately 6 billion barrels in storage are described by Nasser as “not practically available.”
- Strategic Reserve Release: G7 leaders recently agreed to release roughly 100 million barrels of crude and diesel from strategic reserves to ease market pressure.
- Market Share: The Strait of Hormuz handles about 20 percent of the world’s oil and LNG flows.
Official Statements & Responses
- Saudi Aramco: Nasser emphasized that pressure will intensify at “both ends of the barrel” until the strait fully reopens and confidence returns to energy markets.
- G7 Coordination: The Group of Seven (France, Canada, Germany, Italy, Japan, the United Kingdom and the United States) announced a coordinated release of emergency reserves, aiming to lower fuel prices and mitigate disruptions.
- Regional Adjustments: Saudi Arabia, the United Arab Emirates and Kuwait have increased tanker shipments through the strait, while Aramco has restored its East-West pipeline to about 80 percent of capacity, shifting more crude to the Red Sea.
Why It Matters
The thin global oil buffer heightens the risk that any further interruption—whether from additional geopolitical tension, extreme weather, or infrastructure failure—could trigger sharp price spikes. Energy traders are already pricing a significant risk premium, with some forecasts suggesting crude benchmarks could climb toward $120 per barrel if the strait faces further disruptions. The situation also limits Aramco’s ability to offset deficits single-handedly, given OPEC+ production quotas and broader market constraints.
Verbatim Quotes
- “Even then, replenishing inventories while meeting demand could take up to two years,” — Amin Nasser, saudi aramco CEO
What's Next
The G7’s emergency-reserve release is a temporary measure; no further coordinated actions have been announced. Aramco continues to seek additional export routes and overseas storage capacity to reduce reliance on any single corridor, but the timeline for fully restoring the Strait of Hormuz remains uncertain.