Global oil inventories could require up to two years for replenishment, Saudi Aramco CEO Amin Nasser said Monday at the Energy Intelligence conference in London. Nasser warned that the squeeze on supplies will worsen as military conflict in the region continues.
Since military strikes began in late February, approximately 3 billion barrels of oil supply have been lost. Concurrently, 1 billion barrels have been released from existing stocks to mitigate the deficit.
The majority of this stock draw has come from commercial inventories. Nasser stated that the remaining 6 billion barrels in storage are not practically available for market consumption, indicating a significant constraint on accessible reserves. "The system is already straining," Nasser said.
Nasser emphasized that pressure on both crude and refined products will intensify until the Strait of Hormuz fully reopens and market confidence stabilizes. The strait typically facilitates the passage of approximately 20 percent of the world's oil and liquefied natural gas supplies.
The ongoing conflict has severely disrupted shipping through this critical waterway. On Monday, Iran's Islamic new Guard Corps hailed a tanker transiting the Strait of Hormuz, instructing it to turn back or face targeting. The United Kingdom Maritime Trade Operations Centre, a maritime security alert service, reported the tanker complied. The incident occurred about 11 nautical miles north of Oman's port city of Khasab.
In response to supply concerns, G7 governments agreed Friday to release 100 million barrels of diesel and crude from their emergency reserves following pressure from U.S. President Donald Trump.
Oil prices showed mixed movements Monday. International benchmark Brent crude futures for December delivery rose 0.7 percent, trading at $102.92 per barrel. U.S. West Texas Intermediate futures for November delivery fell 0.4 percent, settling at $90.76.
Despite the Strait of Hormuz incident and Nasser's warnings, Middle East crude exports reportedly increased. Flows through both the strait and Saudi Arabia's key East-West pipeline trended higher, according to market reports.
Some analysts counter Nasser's bearish outlook, suggesting that record oil production levels and the development of alternative delivery routes could accelerate inventory rebuilding once the Strait of Hormuz fully reopens. This perspective implies that Nasser's two-year recovery forecast may be overly pessimistic given potential market adjustments.
