Global oil inventories that are readily available to the market have fallen to extremely low levels, raising concerns about supply security and increasing volatility in oil prices.
Industry executives speaking at the Energy Intelligence Forum in London warned that limited accessible reserves are making the global oil market increasingly vulnerable to further supply disruptions.
Saudi Aramco Warns of Inventory Stress
Saudi Aramco CEO Amin Nasser said global commercial oil inventories have reached what he described as a stress point.
According to Nasser, less than 6 billion barrels remain in commercial inventories worldwide. However, much of that supply cannot be quickly or practically released into the market.
As a result, the amount of oil that is actually available to respond to unexpected shortages is significantly smaller.
More Than 1 Billion Barrels Already Released
Governments and energy companies have been drawing down oil inventories throughout the year in an effort to stabilize the market.
Supply disruptions linked to conflicts in the Middle East and Ukraine have increased pressure on global energy markets and forced countries to rely more heavily on existing stockpiles.
Nasser said more than 1 billion barrels have been released, mainly from onshore commercial inventories, since the latest Middle East crisis began.
He also warned that inventory releases represent one of the last major tools available to policymakers if additional disruptions occur.
IEA Plans Another 100 Million Barrel Release
The International Energy Agency is now preparing to release around 100 million barrels of crude oil and diesel in response to rising fuel prices, particularly diesel.
However, questions remain over whether part of this volume could come from barrels included in the IEA’s record 400 million barrel release announced in March but not yet delivered to the market.
Nasser said securing the additional 100 million barrels required significant negotiations.
More importantly, he warned that accessible inventories are becoming increasingly limited. According to the Saudi Aramco CEO, only around 10% or less of existing inventories may be practically available to the market.
Global Oil Demand Remains Strong
Meanwhile, global oil demand remains high.
According to the International Energy Agency, worldwide consumption currently stands at approximately 102 million barrels per day.
Nasser also highlighted strong demand from countries and companies seeking to rebuild their inventories.
This combination of high consumption, reduced stockpiles and geopolitical supply risks could leave the oil market increasingly sensitive to future disruptions.
With limited spare inventories available, even relatively small supply shocks could potentially have a larger impact on Brent crude and global energy prices.
