The International Energy Agency will release another 100 million barrels of diesel, gasoline and crude oil, but global inventories keep shrinking during the Hormuz crisis. The U.S. Strategic Petroleum Reserve sits at its lowest level since 1983. Aramco's chief executive says refilling stocks could take up to two years.
The International Energy Agency, after consulting with G7, said it would release another 100 million barrels of diesel, gasoline and crude oil earlier this week. The release is part of a plan announced in March to release 400 million barrels in response to the Hormuz squeeze. The problem is that storage is emptying.
U.S. reserve nears its operational minimum
As of the start of October, the U.S. Strategic Petroleum Reserve held 331.2 million barrels, the lowest since 1983, after the latest release of over 9 million barrels. The draws are part of a 172-million-barrel release the United States committed to earlier this year.
That level is close to what experts describe as the operational minimum of 250 to 300 million barrels for the storage system. Falling near it begins to affect the storage infrastructure, according to the source.
Global stocks keep falling
Global stocks are also declining. The IEA's September report said global oil inventories dropped by 95 million barrels in August, bringing total draws since February to 507 million barrels. OECD commercial inventories rose by 23 million barrels, offsetting a 19-million-barrel draw in strategic reserves.
That relief was short-lived. Aramco chief executive Amin Nasser told the Energy Intelligence Forum in London that, according to his remarks, "the supply resilience cushion is scarily thin." Replenishing drained inventories could take up to two years, and only after the Strait of Hormuz reopens, Nasser noted.
Nasser also said the world has drawn over 1 billion barrels from inventories since the start of the war between the United States and Israel, and Iran, most of it from commercial stocks.
IEA says more stocks are available
IEA head Fatih Birol said member governments still hold publicly held emergency stocks equivalent to around 1.1 billion barrels, including over 200 million barrels of diesel. The agency stands ready to release more if and when required, he said.
Meanwhile, countries in Asia are racing to build their own inventories. Nine Southeast Asian governments said this week that the most advanced efforts support national oil stockpiling systems and voluntary regional joint stockpiling.
Source: Oilprice.com
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