Saudi Aramco CEO warns of dangerously low global oil reserves

Oil reserves, which protect the world from supply disruptions, have become alarmingly low. This was stated by Saudi Aramco Executive Director Amin Nasser, as quoted by Bloomberg.

According to a representative of the largest oil company, the release of raw materials from reserves will provide only temporary support to markets. The tense situation in the oil market will intensify until the Strait of Hormuz opens.

Nasser spoke at the Energy Intelligence Forum in London days after governments in the world's largest economies announced plans to release up to 100 million barrels of reserve oil and diesel reserves to curb rising fuel prices.

“Until the Strait of Hormuz opens fully and trust is restored, pressure will increase on both sides. Oil prices are rising, but prices for fuel for refining have risen even more,” he noted.

Releasing reserves will give the economy some time, but will not eliminate the imbalance between supply and demand. Even after the critical water transport artery reopens, it could take energy-consuming countries up to two years to replenish their supplies.

Gulf oil producers are ramping up production and exports and have already boosted oil supplies to near pre-war levels. Saudi Arabia and its neighbors such as the United Arab Emirates and Kuwait use their own tankers to transport oil through the Strait of Hormuz. Nasser said Aramco is looking at alternative oil export routes and additional international storage facilities to avoid relying too heavily on any one method to ship crude to buyers around the world.