New Delhi, October 5 (IANS). Saudi Aramco Chief Executive Officer (CEO) Amin Nasser warned on Monday that global oil reserves had reached dangerously low levels. In such a situation, if the Strait of Hormuz is not completely normalized, global energy markets may face further supply risks.
Addressing the Energy Intelligence Forum held in London, Nasser said that under normal circumstances, oil reserves work to protect the market from shocks, but at present these reserves have reduced significantly, due to which the impact of any new crisis can be more serious.
He said that the decision by major economies to release strategic petroleum reserves may provide short-term relief, but it will not solve the fundamental imbalance of demand and supply present in the global energy market.
Nasser said that until the movement of oil and fuel through the Strait of Hormuz is completely normalized and market confidence is not restored, pressure on crude oil and refined fuel markets may remain.
His comments come at a time when the world's major economies have recently announced plans to release about 100 million barrels of emergency oil and diesel reserves to control rising fuel prices.
The Aramco chief said that even after the Strait of Hormuz is fully opened, it may take up to two years for global oil reserves to return to normal levels. This makes it clear that the current pressures may persist not only in the short term but also in the medium term.
It is noteworthy that the regional conflict that started after the attacks on Iran by the US and Israel this year had affected the Strait of Hormuz, which is considered the most important route for global energy trade. Due to this, concerns regarding oil supply and maritime transportation had increased.
However, the major producing countries of the Gulf region have intensified efforts to restore exports. As a result, crude oil supplies are beginning to approach pre-conflict levels.
Saudi Arabia, the United Arab Emirates (UAE) and Kuwait have increased the use of their own tanker fleets to maintain oil transportation. At the same time, Saudi Aramco has increased exports from the Ras Tanura terminal and has also restored the capacity of the East-West Pipeline, which was affected after the recent attack, to about 80 percent.
Despite this, the perception of danger remains in the market. Experts say the oil market is still factoring geopolitical uncertainties into prices due to ongoing security risks in the Persian Gulf and Red Sea.
For this reason, the international benchmark Brent crude has been trading around $ 100 per barrel for the last one month. This indicates that investors are still concerned about potential supply constraints.
–IANS
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