Aramco CEO: World's oil buffer is 'scarily thin' and could take two years to rebuild

The head of the world's largest oil company stepped before a London audience on Monday and delivered a blunt verdict on seven months of war in the Persian Gulf: the emergency stockpiles that protect economies from supply shocks are nearly gone, and no quick fix — not government releases, not rerouted tankers — will restore them.

The system is already straining. And with precious little else the world can turn to, the supply resilience cushion is scarily thin.— Amin Nasser, CEO, Saudi Aramco

Nasser, speaking at the Energy Intelligence Forum in London on October 5 in his first public address since the conflict began, said the war involving the US, Israel and Iran has reduced oil supply from the region by nearly 3 billion barrels over seven months — roughly half the crude and refined fuels that would have transited the Strait of Hormuz over that period. More than 1 billion barrels have since been pulled from reserves to cover the shortfall, the bulk of it from commercial stocks held by companies rather than government strategic reserves.

That distinction matters. In the days leading up to Nasser's speech, the world's largest economies unveiled plans to release up to 100 million barrels of emergency oil and diesel, then agreed on Friday to authorize additional releases. But Nasser was explicit that those releases, while useful, address only a fraction of the damage. Commercial inventories — which he called 'the last major tool in the box' — have now fallen below 6 billion barrels, with the vast majority of that figure not practically accessible.

Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify. While the squeeze on crude is serious, refined fuel prices have risen even more sharply.— Amin Nasser, CEO, Saudi Aramco

Over the past month, Brent crude, the international benchmark, has held near $100 a barrel, Bloomberg data show, even as tanker traffic through Hormuz has increased. Saudi Arabia, the United Arab Emirates and Kuwait have deployed their own vessels to lift exports, pushing Gulf crude flows to 15.5 million barrels a day last month — the highest point since the war began and above 80 percent of pre-conflict volumes, according to data provider Kpler. Prices for North Sea cargoes scheduled for delivery this month reached their highest point since April.

The partial recovery in flows has not calmed markets, and the underlying infrastructure remains under attack. Ships transiting Hormuz have continued to face Iranian strikes, and Aramco's pipelines, refineries and ports have come under attack from Iran-aligned groups in Iraq and Yemen. Aramco's main cross-country East-West pipeline was hit last month; the company has since restored flows to about 80 percent of capacity, allowing more oil to reach the Red Sea for export.

Nasser raised a less-discussed dimension of the conflict's threat to energy infrastructure: the weaponisation of open-source data. Satellite imagery and shipping logs, he said, have been used to locate and target facilities.

Tools of transparency should not become ammunition for aggression.— Amin Nasser, CEO, Saudi Aramco

Looking ahead, Nasser said Aramco is studying alternative export routes for Saudi crude and exploring overseas storage facilities to reduce dependence on any single corridor to global buyers. He called on governments to make energy security and resilience a priority — and warned that even once hostilities end, replenishing inventories while simultaneously meeting ongoing demand could take up to two years.

The Strait of Hormuz, a narrow waterway between Iran and Oman, is the single most important chokepoint in global oil trade. The conflict began at the end of February when the US and Israel attacked Iran, triggering a regional war that has intermittently obstructed the strait and disrupted shipping across the Persian Gulf and Red Sea.

Why it matters — With commercial oil buffers at their lowest practical level and a two-year rebuild timeline even in a best-case scenario, consumers and governments face a prolonged period of elevated fuel costs and supply vulnerability — regardless of how quickly the fighting stops.

Reported by bloomberg.com, en.lanatime.com, finance.yahoo.com, business-standard.com