Heads of Saudi Aramco and Vitol warn of depletion of global oil reserves

The chief executives of Saudi Aramco and Vitol Group spoke at the Energy Intelligence Forum in London with the same warning: after more than seven months of war with Iran, the world has used up nearly all of its oil reserves.

Saudi Aramco CEO Amin Nasser said on Monday, October 5, that the global “supply buffer is alarmingly thin.” On Tuesday, October 6, Vitol Group CEO Russell Hardy said that Western inventories are exhausted and that the fuel market will likely remain tight through the winter.

The remarks came days after G7 nations, together with the International Energy Agency, agreed to release 100 million barrels of diesel and crude oil to bring down fuel prices.

Nasser said the world entered the crisis with nearly 10 billion barrels of oil in storage, while commercial inventories have now fallen to less than 6 billion barrels. According to him, less than 10% of what remains can realistically be used due to technical constraints: a significant portion of what countries report as reserves is the minimum volume needed to keep infrastructure operational. “That’s why you see them struggling with 100 million barrels,” he added.

“Until the Strait of Hormuz fully reopens and confidence returns, the harsh reality is that pressure at both ends of the supply chain will only grow,” Nasser said.

He noted that prices for refined products are rising faster than crude oil prices. According to The Telegraph, Nasser described above-ground commercial inventories as “the last major tool in the arsenal.” “Emergency reserves may help us get through one winter. But they cannot solve the long-term supply problem,” he said.

Nasser also said that even after the Strait of Hormuz reopens, restoring inventories could take up to two years, and the restocking effort would add at least 2 million barrels per day to demand. He said Aramco’s production capacity has not been damaged. The company is exploring alternative export routes and examining plans to increase its storage capacity by two to three times.

Hardy was even more direct. “There are no more inventories in the West that can be drawn down,” he said, according to Bloomberg.

“We have drawn all the available stocks,” Hardy said.

His warning came against a backdrop of rising heating demand. According to Argus, ultra-low-sulfur diesel inventories in the New York region fell to 8.9 million barrels in the week ending September 25 — the lowest level in more than four years, and more than 37% below the level of a year earlier.

Hardy had predicted a shortage back in April. At the FT Global Commodities Summit in Lausanne, he estimated that since the start of the war on February 28, the world had lost roughly 12 million barrels of oil per day. He said that even if the Strait of Hormuz were to reopen soon, the cumulative production losses would amount to around 1 billion barrels. “We have borrowed supply,” he said at the time.

Since then, some supply has recovered. According to Kpler, oil exports from Middle Eastern countries (excluding Iran) last week exceeded pre-war levels, despite attacks on vessels in the strait. Both executives noted that this recovery is insufficient to replenish the inventories drawn down during the war.