World's energy supply buffers have been eroded, ADNOC CEO says

ADNOC CEO Sultan Al Jaber has warned that the world's energy supply buffers have been significantly eroded, following the US-Israeli war on Iran. This disruption has led to a substantial reduction in global oil inventories, with nearly 1 billion barrels drained from storage since the conflict began. Diesel stockpiles in some regions are at their lowest levels in 35 years, while others are facing an LNG supply gap of 600 billion cubic feet.

As a result, diesel prices have skyrocketed to record highs, posing significant inflation and cost-of-living challenges for governments and consumers. Al Jaber emphasized the urgent need for expanded strategic storage, larger product stockpiles, and flexible refining capacity closer to consumer markets. He stressed that infrastructure must be constructed before it is needed, enabled by advanced logistics.

The rising cost of shipping and logistics now accounts for 30% of the price of a barrel, up from just 5% before the Iran war. Brent crude is currently trading at around $110 a barrel, a 50% increase from February before the war commenced. In response to the crisis, the International Energy Agency agreed to release over 20 million barrels of diesel into the market, and any remaining oil from a record emergency reserves release pledged in March.

Saudi Aramco CEO Amin Nasser revealed that fewer than 6 billion barrels of commercial inventories remain, with the majority not practically available.