The global oil market is rapidly losing one of its most important safeguards against further supply disruptions, as the amount of oil readily available from existing inventories has fallen to critically low levels.
More than one billion barrels have been withdrawn from stockpiles since the beginning of this year’s energy crisis, leaving the market with a significantly reduced buffer against additional disruptions.
“Inventories are reaching a stress level,” Saudi Aramco CEO Amin Nasser warned at the Energy Intelligence Forum in London.
According to Nasser, less than six billion barrels remain in commercial inventories, but the vast majority of that volume is not practically available to the market.
“Only 10% or less is available,” Nasser said, highlighting the increasingly limited flexibility within the global oil supply system.
The world entered the current crisis with almost 10 billion barrels of oil in global inventories. Since the start of the conflict in the Middle East, nearly three billion barrels of potential oil supply have been disrupted, while more than one billion barrels have been drawn from inventories to offset part of the shortfall.
Most of those withdrawals came from onshore commercial storage facilities, which Nasser described as the last major buffer available to the market.
Not all stored oil can be immediately brought into circulation. Some volumes must remain in pipelines and storage facilities to keep the system operating, while other quantities are difficult to extract because they are located at the bottom of storage tanks. Strategic government reserves are also subject to legally mandated minimum levels.
Last week, G7 countries agreed to coordinate the release of 100 million barrels of oil and petroleum products through the International Energy Agency over a four-month period. A significant portion of the release will be front-loaded, particularly diesel supplies, in an effort to ease immediate pressure on global energy markets.
Global oil demand stands at approximately 102 million barrels per day. That means the 100 million barrels covered by the G7 agreement are equivalent to roughly one day of global consumption. However, the reserves will be released gradually over four months, with the aim of addressing specific supply shortages rather than replacing normal market flows.
Nasser has warned that emergency reserves can buy the global market time, but they cannot resolve a prolonged supply deficit. Rebuilding depleted inventories could take up to two years, even if oil flows through the Strait of Hormuz return to normal.
The warning underscores the vulnerability of the global energy system, where prolonged disruptions have reduced the amount of readily accessible oil available to absorb further shocks.
