Amin Nasser, CEO of Saudi Aramco, highlighted the issue this week at the Energy Intelligence forum in London, UK. Commercial oil reserves now stand at less than 6 billion barrels, much of which is inaccessible, straining the global energy system.
The depletion follows the release of over 1 billion barrels since the Middle East conflict began in late February. This oil primarily came from onshore commercial reserves, a resource Nasser described as the world's "last major tool" for market stabilization. The low accessible reserves make the market fragile and increase energy price pressure.
Chevron CEO Mike Wirth echoed these concerns, stating that losing these buffers makes the market more vulnerable and elevates crude oil floor prices. The International Energy Agency (IEA) is preparing to release an additional 100 million barrels of crude and diesel to mitigate surging diesel prices.
Despite such releases, Nasser cautioned that only 10% or less of total reserves can be mobilized, explaining the IEA's struggle. He noted the world requires 102 million barrels of oil daily, according to the IEA. This highlights the critical gap between supply and demand.
Energy leaders predict market volatility will persist until 2027. Replenishing global oil reserves while simultaneously meeting demand will be a multi-year effort. This process is complicated by operational factors, such as oil at the bottom of storage tanks or in pipelines, and political factors, including government regulations on minimum emergency reserve levels.
The current global demand for oil storage is high, according to Nasser. Shaikh Nawaf Al-Sabah, CEO of Kuwait Petroleum Corporation, confirmed his company's plan to expand domestic storage and overseas refinery capacity.
Russell Hardy, CEO of commodity trading firm Vitol, indicated that this winter, the world will rely on seaborne oil exports from the Middle East, as "the West no longer has reserve oil to draw on." US Department of Energy data shows the country's strategic petroleum reserve is at its lowest since 10/1982.
Natural gas reserves also face depletion, making prices susceptible to spikes. Tengku Muhammad Taufik, CEO of Petronas, warned that "a harsh winter could disrupt the gas market in Q1/2027 if reserves hit minimum levels."
Ha Thu (according to Reuters)
