Saudi Aramco chief warns oil stockpiles are ‘scarily thin’ as Hormuz crisis persists

Global oil stockpiles that provide a buffer against supply disruptions have become “scarily thin”, Saudi Aramco chief executive Amin Nasser has warned.

He said that pressure on oil markets could intensify unless the Strait of Hormuz fully reopens.

Speaking at the Energy Intelligence Forum in London on Monday, Nasser said the release of emergency oil and diesel reserves by governments would provide economies with some time but would not resolve the imbalance between supply and demand.

“Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify,” Nasser said. He added that refined fuel prices had risen even more sharply than crude prices.

Governments in some of the world’s biggest economies have announced plans to release up to 100 million barrels from emergency oil and diesel stocks to ease rising fuel costs. Nasser said it could take consuming countries up to two years to rebuild their reserves even after the Strait of Hormuz reopens.

Gulf producers have been increasing production and exports, with crude flows approaching pre-war levels. Saudi Arabia, the United Arab Emirates and Kuwait have also been using their own tankers to transport crude through Hormuz, which has been partly obstructed since the US and Israel attacked Iran at the end of February, triggering a regional war.

The increased flows have provided limited relief to oil markets, which continue to price in security risks in the Persian Gulf and Red Sea. Brent crude has traded at around $100 a barrel over the past month despite increased tanker traffic through Hormuz.

Saudi Aramco has increased crude shipments from its main export terminal at Ras Tanura over the past month. The company also responded to a temporary halt to its main cross-country pipeline following an attack last month.

Flows through the East-West pipeline have since recovered to about 80% of capacity, allowing Aramco to ship more oil through the Red Sea.

Nasser said Aramco had maintained resilient oil supplies during the conflict by using international storage and quickly repairing damaged infrastructure. The company is also seeking alternative crude export routes and additional international storage facilities to reduce its dependence on any single route to global markets.