Global oil stockpiles fall to 'scarily' low level, Saudi Aramco warns

Global oil reserves have plummeted to an alarmingly low level, according to Saudi Aramco's chief, Amin Nasser, who spoke at the Energy Intelligence Forum in London on October 5th. This alarming situation heightens the risk of a deteriorating oil market if the Strait of Hormuz remains closed to unrestricted ship traffic. Until Hormuz reopens and confidence is restored, pressure at both ends of the oil pipeline will intensify, Nasser warned.

While the refined fuel prices have surged even more sharply, the situation at hand is dire. The G7 nations decided on October 2nd to release up to 100 million barrels of oil and diesel fuel from strategic reserves to alleviate the escalating prices. However, Nasser cautioned that this relief measure will not eradicate the stark disparity between supply and demand.

Even after the Strait of Hormuz is restored, countries may require up to two years to replenish their reserves, he added. Saudi Aramco has managed to maintain oil supplies steady during the Middle East conflict by utilizing storage abroad and swiftly repairing damaged infrastructure. The company is actively seeking alternative oil export routes and additional storage abroad to mitigate excessive reliance on a single method of delivering oil to global buyers, Nasser explained.

Aramco can attain its maximum sustainable production capacity of 12 million barrels per day within a few days, he stated, adding that the company possesses strategic reserves and can isolate individual sections and redistribute production if required. Houthi representative Yahya Saree declared on X that the group had successfully targeted two Saudi Aramco facilities on Saudi soil using missiles and drones, vowing that the Houthis would persist in striking military and oil facilities in Saudi Arabia.

Just a day earlier, on October 4th, OPEC+ countries agreed to maintain oil production targets for November.