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Saudi Aramco CEO Warns of Severe Global Oil Shortages If Hormuz Remains Blocked
- •Saudi Aramco CEO Amin Nasser warned that global oil stockpiles have reached dangerously low levels.
- •Failure to fully normalize the Strait of Hormuz will expose global energy markets to severe supply risks.
- •Experts estimate it could take up to two years to fully replenish global oil reserves back to normal levels.
- •Saudi Arabia and regional producers have increased tanker fleets and exports from Ras Tanura to stabilize supplies.
Key Questions Answered
Saudi Aramco CEO Amin Nasser warned that global oil stockpiles have reached dangerously low levels and that unless the Strait of Hormuz completely normalizes, energy markets will face intense supply risks and severe impacts from any new crisis. He noted that the ongoing disruption has removed millions of barrels from global markets, creating the biggest supply shock in history.
According to the Saudi Aramco chief, even after the Strait of Hormuz is fully reopened, it could take up to two years for global oil reserves to return to normal levels. Another related report notes it would take an average of 18 months at a rate of 2.1 million barrels a day to replenish depleted inventories.
To bypass the disruption in the Strait of Hormuz, Saudi Arabia, the UAE, and Kuwait have increased the use of their own tanker fleets for shipments. Specifically, Saudi Aramco has increased exports from the Ras Tanura terminal and restored about 80 percent of the capacity of the East-West pipeline, which transports oil to the Red Sea.
