Saudi Aramco warned of critically low global oil reserves

Global oil reserves have dropped to a critically low level after seven months of crisis in the Middle East, which led to a large-scale supply cut. This was stated by Saudi Aramco CEO Amin Nasser, reports Financial Times.

According to the head of Saudi Arabia's largest oil company, since the crisis began the global market has been under-supplied by almost 3 billion barrels of oil. To compensate for the shortage, countries have already used over 1 billion barrels from commercial and strategic reserves.

Nasser said during the Energy Intelligence Forum that the current reserve level creates vulnerability for the global oil market. According to him, it will not be possible to replenish the used reserves quickly - returning reserves to a more comfortable level could take up to two years.

The reduction in reserves means that the global market has fewer opportunities to offset new supply disruptions. Reserves are usually used as a buffer when less oil enters the market than consumers need due to wars, sanctions, natural disasters or accidents.

Saudi Aramco's assessment comes amid attempts by major economies to curb fuel shortages at the expense of reserves. However, prolonged use of such reserves without their rapid replenishment gradually reduces this insurance "cushion".

According to Nasser, the situation also highlights the need for new investments in production. If demand remains high, and spare capacity and reserves decline, the global market will have less ability to respond to the next supply disruptions.