Amin Nasser, CEO of Saudi Aramco, warned at an energy information conference in London about the severe reduction in oil reserves that protect the world from supply shocks. He emphasized that this decrease could exacerbate market crises unless the Strait of Hormuz is reopened.
Decrease in Oil Reserves and Increase in Demand
Nasser stated that as long as the Strait of Hormuz is not fully opened and confidence in the oil market is not restored, pressure on oil supply will continue. He said, "The stark reality is that pressure on both the supply and demand sides will intensify." Nasser also noted that while the pressure on crude oil supply is serious, refined fuel prices have increased significantly more.
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With the increase in crude oil consumption and the need for various countries to secure their reserves in the next two years, demand could rise by at least 2 million barrels per day (MMbpd). This increase in demand may be even greater if governments decide to boost reserves. Nasser said, "When the war between the United States and Iran began, the world had about 10 billion barrels of oil reserves, but this figure has now decreased to less than 6 billion barrels."
Saudi Aramco's Efforts to Increase Production
Nasser stated that despite the decrease in oil reserves, all upstream capacities of Saudi Aramco remain intact, and the company has been able to continue supplying contracts with buyers in Europe and Asia. Saudi Aramco has utilized various export routes and has addressed customer needs by adjusting supply between different grades of crude oil and employing its tanker fleet.
Last month, Saudi Aramco increased crude oil shipments from its main export terminal at Ras Tanura. The company quickly responded to the temporary shutdown of its main pipeline following an attack last month and has since managed to restore flows to about 80 percent capacity.
Nasser also referred to Saudi Aramco's search for alternative export routes to reduce dependence on a specific method. He mentioned without providing details that the company is exploring plans that could triple or quadruple its storage facility capacity.
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