The actual available reserves of oil on the global market have reached a worryingly low level, making the market more vulnerable to new supply shocks and putting pressure on prices, warn executives of major energy companies gathered in London.
Governments and oil companies have heavily relied on existing stocks to offset the unprecedented supply disruptions caused this year by the wars in the Middle East and Ukraine, writes Reuters.
Amin Nasser, the CEO of the state oil company from Saudi Arabia, Saudi Aramco, stated at the Energy Intelligence Forum that there are currently less than 6 billion barrels in commercial stocks, and most of it is not practically available.
"The system is already under considerable pressure," Nasser warned.
Over 1 billion barrels of oil have been released, mainly from onshore commercial stocks, since the beginning of the Middle East crisis. According to the head of Saudi Aramco, this practically represented the last major reserve the market could rely on.
IEA prepares for a new oil release
The International Energy Agency (IEA) is preparing to release 100 million barrels of crude oil and diesel into the market in an attempt to alleviate pressure on diesel prices.
However, it is not clear whether some of this quantity will come from the volumes included in the record release of 400 million barrels announced by the IEA in March and which have not yet reached the market.
"Stocks have reached a stress level. Only 10% or less is available, that's why it's so difficult to release 100 million barrels," Nasser said.
Global oil demand is about 102 million barrels per day, according to the IEA.
Mike Wirth, CEO of Chevron, warned that the depletion of buffer stocks has made the oil market more fragile and raised the minimum level at which prices can fall.
Replenishing stocks could take years
Industry executives estimate that market instability could continue even after next year. Replenishing stocks could take years as producers need to cover global demand simultaneously.
Moreover, not all oil in storage can be used immediately. Some is locked for operational reasons, such as quantities remaining at the bottom of tanks or oil in pipelines. Other volumes cannot be accessed due to regulations that governments impose to maintain minimum levels of strategic stocks.
The pressure to build new reserves is already very high. Kuwait Petroleum Corporation intends to expand its storage capacities both in Kuwait and at its overseas refineries.
At the same time, the global market increasingly relies on the fact that oil exports transported by sea from the Middle East continue to reach international markets.
"There are no longer stocks that the West can deplete," said Russell Hardy, CEO of commodity trader Vitol, referring to the approaching winter season.
US reserves at lowest level since 1982
In the United States, oil reserves from the Strategic Petroleum Reserve have reached their lowest level since October 1982, according to the Department of Energy data.
The situation of natural gas stocks is also worrisome. Low levels make prices vulnerable to sudden increases in case of supply issues.
Tengku Muhammad Taufik, CEO of Petronas, warned that a severe winter could cause an extremely challenging situation in the gas market in the first quarter of 2027 if stocks drop to minimum levels.