Al Jaber: Hormuz disruption drained about 1 billion barrels from global crude inventories
Key Facts
Sultan Al Jaber, chief executive of ADNOC, said at the opening of the ADIPEC conference on November 2 that disruption to shipping through the Strait of Hormuz had drained about 1 billion barrels of crude from global inventories. The figure puts the scale of the drawdown since the disruption began at the center of debate over the energy system’s ability to continue meeting demand. Al Jaber said seasonal diesel inventories in some markets had fallen to their lowest levels in 35 years. In other markets, liquefied natural gas supplies face a shortfall of 600 billion cubic feet. Al Jaber summed up the crisis’s impact: "Simply put, the world has depleted its available supply buffers."
Figures presented by Al Jaber show that the cost of transporting crude has become a much larger share of the cost per barrel. Shipping and logistics rose from less than 5% before the disruption to more than 30% afterward, he said. These costs include insurance, though his remarks did not specify a separate change in premiums. The shift means the disruption’s effects extend beyond crude availability to the cost of transporting it to market. Al Jaber’s call therefore focused on rebuilding energy security around access to supplies, alongside maintaining production.
Oil-flow data through the strait provide context for the scale of the disruption. Flows fell to 4.9 million barrels per day in the second quarter of 2026, from 21.6 million barrels per day in the fourth quarter of 2025, before the conflict began, according to estimates by the U.S. Energy Information Administration. The agency also estimated that global crude inventories fell by an average of 5.1 million barrels per day in the second quarter. By the end of September, observed global inventories were 509 million barrels below prewar levels, according to the International Energy Agency. The agency said onshore inventories remained at their lowest levels since at least 2016.
The squeeze extended to refined fuels, particularly diesel and gasoil. Global supplies of the two products fell by 1.5 million barrels per day in the second quarter of 2026 and by 1.7 million barrels per day in the third quarter, compared with the same periods a year earlier, the International Energy Agency said. This is consistent with Al Jaber’s warning that diesel inventories in some markets had reached their lowest seasonal level in 35 years. On prices, Brent futures rose 13% since the start of September to about $107 a barrel at the time the agency prepared its report in October. Dated North Sea crude rose 43% to $134 a barrel, outpacing gains in futures.
As inventories were drawn down, member countries of the International Energy Agency had released about 325 million barrels under the collective action announced in March 2026, as of October 7. The agency said completing the remaining volumes countries had pledged to release could add about 100 million barrels to the market. Governments of member countries had declared emergency oil stocks of about 1.1 billion barrels as of October 7. Those stocks included more than 200 million barrels of diesel. The figures show that emergency measures contributed to supply, while the withdrawal of about 1 billion barrels of crude raises the question of how to rebuild available buffers.
Al Jaber called for stronger strategic storage, larger product inventories and more flexible refining capacity closer to consumer markets. He also set out five pillars for energy-system resilience: available supplies, secure routes to markets, operational intelligence, policies, capital and insurance that support continued trade, and investment in people. Energy security, he said, "is measured not only at the point of production, but now also at the point of delivery." He added that "supply is only half the story; the other half is delivery." The message puts transport, storage and refining costs within the scope of supply security, as inventory and Hormuz-flow data continue to reflect the disruption’s effects.