During a speech at the Energy Intelligence conference in London on Monday, Saudi Aramco CEO Amin Nasser cautioned that restocking global oil reserves is a process that could extend for up to two years. He emphasized that the already tight market conditions face further intensification as the ongoing conflict between the United States and Iran continues to unfold.
Nasser highlighted that approximately 3 billion barrels of oil supply have been removed from the market since military strikes were launched against Iran in late February by U.S. and Israeli forces. In contrast, only about 1 billion barrels have been drawn from existing stockpiles to offset the shortfall. The executive noted that the majority of recent withdrawals have come from commercial inventories, leaving an estimated 6 billion barrels in strategic storage that remain largely inaccessible in practice.
“The system is already straining,” Nasser remarked, describing the pressure on both the supply and demand sides of the barrel. He indicated that stability would only return once confidence is restored to energy markets and the Strait of Hormuz, a critical waterway handling roughly 20% of global oil and liquefied natural gas, fully reopens for shipping.
The warnings followed a decision by G7 governments to release 100 million barrels of diesel and crude from emergency reserves. The agreement was reached on Friday under pressure from U.S. President Donald Trump. The G7 coalition includes France, Canada, Germany, Italy, Japan, the United Kingdom, and the United States, with France currently holding the rotating presidency.
Despite the strain on supplies, oil prices saw modest declines as reports indicated a recovery in Middle East crude flows. Exports moving through the Strait of Hormuz and Saudi Arabia’s East-West pipeline have reportedly shown an upward trend. Nasser reiterated that even if supply routes normalize quickly, balancing demand with the need to refill depleted inventories remains a prolonged challenge.
G7 releasing diesel instead of crude feels like a temporary band-aid. The real replenishment challenge is the hard part.
Does anyone actually trust that the Strait of Hormuz will fully reopen soon? The rhetoric is getting worse by the day.
I’m surprised they only used one billion barrels of stockpile so far. Wouldn’t you want to burn through more while you can?
Two years to refill? That is a terrifyingly long time given how thin margins already are right now.