Saudi Aramco Chief Executive Amin Nasser said global oil inventories have fallen to “scarily thin” levels and that supply pressures are likely to remain until the Strait of Hormuz is fully reopened.
Speaking at the Energy Intelligence Forum in London, Nasser said constraints were affecting crude oil as well as refined products, with fuel prices experiencing larger increases.
Planned releases of as much as 100 million barrels of emergency crude and diesel reserves by major economies could provide some short-term relief, according to Nasser, but would not address the underlying imbalance between global supply and demand.
He said oil-consuming countries could need as long as two years to rebuild their inventories following a full reopening of the Strait of Hormuz.
Gulf Producers Increase Crude Flows
Saudi Arabia, the United Arab Emirates and Kuwait have increased production and exports, including by using their own tankers to transport crude through the Strait of Hormuz.
Crude flows have recovered to near pre-war levels, although Brent has remained around $100 a barrel over the past month as markets continue to account for supply risks affecting the Persian Gulf and Red Sea.
Aramco has increased shipments from the Ras Tanura export terminal while restoring its East-West pipeline to approximately 80% of capacity. Operations on the pipeline had been temporarily halted following an attack last month.
The recovery in pipeline availability has enabled Aramco to route additional crude through the Red Sea.
Nasser said Aramco had maintained supplies during the conflict by drawing on international storage and quickly repairing damaged infrastructure.
The company is also examining alternative export routes and additional overseas storage as part of efforts to reduce reliance on individual supply routes.
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