Aramco: More Than 1 Billion Barrels Drawn From Inventories to Cushion Supply Losses
Key Facts
Aramco Chief Executive Amin Nasser said more than 1 billion barrels of oil had been drawn from inventories since the crisis began to cushion the impact of supply losses. He added that most of the volumes came from onshore commercial inventories, as disruptions in the Strait of Hormuz continued to constrain oil flows. International Energy Agency data show average flows through the strait reached 7.6 million barrels per day in August. That was 13.1 million barrels per day below pre-war levels. The agency estimated cumulative export losses through the strait at about 2.8 billion barrels through August.
Before the war, closure of the strait threatened to cut the passage of about 15 million barrels per day, according to the Associated Press. Alternative routes restored some of the disrupted flows, according to an estimate by a Rystad analyst cited by the agency. Between 6 million and 7 million barrels per day passed through the southern route, alongside 2 million barrels through the pipeline to Fujairah. The total restored to the market through these routes was about 8 million barrels per day. Even so, the analyst estimated that about 7 million barrels per day remained missing compared with pre-war levels.
The decline in flows coincided with daily withdrawals from global inventories estimated at about 3.5 million barrels, according to the Rystad analyst cited by the Associated Press. The analyst also estimated that demand had fallen by about 5 million barrels per day. Over a longer period, the International Energy Agency said global demand in the six months through August averaged 5.8 million barrels per day less than in February. It estimated that this amounted to a cumulative demand reduction of more than 1 billion barrels. Drawdowns from commercial inventories helped keep prices in check, but the Associated Press quoted an agency analyst as saying that this could not continue indefinitely.
In its September report, the International Energy Agency said observed global oil inventories fell by a further 95 million barrels in August. That brought cumulative drawdowns since February to 507 million barrels. The agency's member countries announced in March that they intended to release 426 million barrels of oil and petroleum products to stabilize the market, according to the Associated Press. On October 7, governments backed accelerating the release of the announced inventories, prioritizing diesel where possible. The agency said about 325 million barrels had been released by that date, and that delivering the pledged volumes not yet brought to market could add about 100 million barrels to supply.
Nasser said remaining commercial inventories were below 6 billion barrels, with most of them effectively unavailable. At a conference in Riyadh on October 12, he said onshore commercial inventories had fallen well below 6 billion barrels and diesel had reached about $200 per barrel. North Sea benchmark crude also rose to $113.48 per barrel on September 9, after averaging $91 in August, according to the International Energy Agency. These figures reflect the coincidence of falling inventories with rising oil and diesel prices during a period of supply disruption. The sources did not provide a verifiable figure for the drawdown of liquefied natural gas cited in the earlier draft.
The International Energy Agency cut its forecast for global oil demand in 2026 to a decline of 2.5 million barrels per day. It said a full recovery in Middle Eastern supply had been pushed back to 2027. Replenishing inventories while meeting demand could take up to two years, Nasser said, even after the Strait of Hormuz fully reopens and confidence returns. These estimates put the supply and recovery path at the center of market monitoring in the coming period. Accelerating the release of emergency inventories was also among the measures backed by International Energy Agency governments in October.