Global oil stockpiles are ‘scarily thin’, says Aramco chief

Global oil stockpiles are “scarily thin” and rebuilding inventories could take up to two years, Aramco CEO Amin Nasser has said.

Almost 3 billion barrels of supply have been lost since the Strait of Hormuz disruption began, triggered by the US-Iran war. About 1 billion barrels have already been drawn from stocks, and 6 billion are in storage — though the “vast majority” is not practically available.

“The system is already straining,” he said, adding that “the supply resilience cushion is scarily thin”.

Nasser said the International Monetary Fund expects global economic growth to slow to just 2 percent next year, while inflation is likely to rise above 6 percent.

“The longer the disruption continues, the risk of this happening only grows,” he said.

Speaking at the Energy Intelligence Forum conference in London, the head of Saudi Arabia’s state oil company said Aramco is studying additional routes for crude exports and exploring more overseas storage to help cover short-term disruptions.

Earlier this month Patrick Pouyanne, the chief executive of French oil giant TotalEnergies, said Saudi Arabia had “begun to work” on a pipeline to Duqm, home to Oman’s largest oil refinery.

Nasser said Brent crude futures could have hit $200 per barrel without the East-West pipeline, which allows Riyadh to ship oil to its Red Sea terminals.

Further reading:

• Saudi Red Sea oil stocks slump after pipeline attack
• Hormuz attacks will spur Gulf pipeline push
• Gulf producers plug nearly half pre-war oil output

Riyadh has harnessed its East-West pipeline to the Red Sea coast to avoid Hormuz, but threats of a blockade have slowed ship traffic, and a drone attack on a pumping station last month forced the pipeline to shut temporarily.

It has since reopened and Saudi Arabia’s exports have reached their highest level since the Iran war began, according to maritime intelligence provider Kpler.

Brent crude futures slipped 0.76 percent to $101.50 per barrel on Monday morning, while West Texas Intermediate futures fell 1.16 percent to $90.05. The two benchmarks are up almost 40 percent since the start of the year.