Aramco chief warns oil stockpiles are thin after conflict

Investing.com -- Saudi Aramco's chief executive said global oil stockpiles have reached critically low levels following a seven-month conflict in the Middle East, warning that rebuilding inventories could take up to two years.

Amin Nasser told the Energy Intelligence Forum conference in London that the war between the US, Israel and Iran has cut oil supply from the region by nearly 3 billion barrels. This represents roughly half the crude oil and refined fuels that would normally pass through the Strait of Hormuz during that period.

More than 1 billion barrels of oil have been withdrawn from reserves to offset the supply shortage, Nasser said. Governments have released over 300 million barrels from strategic reserves and agreed Friday to release additional volumes.

The majority of deployed reserves have come from company stockpiles, which Nasser described as the last major available tool. He estimated that less than 6 billion barrels of commercial inventories remain, with most not practically accessible.

"The system is already straining," Nasser said. "And with precious little else the world can turn to, the supply resilience cushion is scarily thin."

Nasser noted that modern technology, including satellite imagery and shipping logs, is increasingly being used to target infrastructure and tankers. In recent weeks, Iran has struck ships moving through the Strait of Hormuz while its proxies in Iraq and Yemen have attacked Aramco's pipelines, refineries and ports.

"Tools of transparency should not become ammunition for aggression," Nasser said.

Shipments from Gulf countries rose to 15.5 million barrels per day last month, the highest level since the war began and more than 80% of pre-conflict volume, according to data provider Kpler. These shipments have been costly, and oil markets remain tight, with prices for physical North Sea crude cargoes for delivery this month rising to their highest levels since April.

Aramco is studying additional export routes for Saudi crude and exploring further overseas storage facilities to protect customers against future disruptions, Nasser said.

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