Aramco's Nasser says oil stocks could take two years to refill even after Hormuz reopens

Saudi Aramco chief executive Amin Nasser said on Monday, October 5, that refilling the world's oil stocks could take up to two years, even after the Strait of Hormuz fully reopens.

"Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify," he told the Energy Intelligence Forum in London. "Even then, replenishing inventories while meeting demand could take up to two years."

"The system is already straining," he said, in his first in-person speech since the Iran war began.

Parliament speaker Mohammad Baqer Qalibaf said on Sunday, October 4, that the strait will not be opened until seven conditions are met.

JPMorgan said on Tuesday, September 29, that Middle East crude exports were at 98% of the level before the war, and refined-product exports at 58% of that level.

Nasser said almost 3 billion barrels of gross oil supply have been lost since the conflict began, roughly half the crude and refined products that would normally have moved through the strait over that time. He said 1 billion barrels have been released from global stocks.

About 6 billion barrels are still in storage, he said, and up to 90% of that is not practically available. It sits in pipelines, or it is the oil a tank must hold to keep operating.

Refilling all inventories, he said, would mean an extra 2 million barrels a day of demand over the next 18 months.

He said Saudi Arabia's maximum sustainable capacity of 12 million barrels a day could be made available within days, and that its strategic reserves were intact.

On Friday, October 2, the G7 said it would release 100 million barrels through the International Energy Agency over four months, starting immediately, with a substantial diesel release in the first 20 days. The leaders said the 100 million takes into account commitments already fulfilled. It is a tenth of the 1 billion barrels Nasser says have already come out of stocks.

The US Energy Information Administration, in its outlook of Wednesday, September 9, said that if its assumptions hold, global stocks start building again in the second half of 2027. That is a sooner date than the up to two years Nasser gave.

The same day as the speech, Aramco set the November price of Arab Light crude for Asian buyers at $5 a barrel below the average of Oman and Dubai prices. The cut is $3 from October, and the discount is the widest since June 2020. Traders surveyed ahead of the decision had expected a higher price.

At 9:40 a.m. Eastern time, Brent crude was at $101.54 a barrel, down 0.7%. US crude was at $89.59, down 1.7%. BUSO, the fund that holds near-term futures on US crude, was down 2% at $144.52.