Global oil inventories have been drawn down sharply during the Middle East and Ukraine wars, leaving only a fraction of remaining commercial stocks readily available and raising concerns that energy markets have little cushion left against another major disruption.
By yourNEWS Media Newsroom.
The world’s usable oil stockpile buffer is approaching critically low levels after months of supply disruptions and emergency releases, energy executives warned this week, leaving the market increasingly exposed to price spikes if Middle East exports or other major sources are interrupted.
Saudi Aramco Chief Executive Amin Nasser said at the Energy Intelligence Forum in London that fewer than 6 billion barrels remain in global commercial inventories and that most of that oil cannot be readily drawn into the market.
“Less than 6 billion barrels of commercial inventories remain today, with the vast majority not practically available, so the system is already straining,” Nasser said.
The warning comes after governments and energy companies released large volumes of oil this year in response to supply disruptions associated with the Middle East conflict and the war in Ukraine.
Nasser said more than 1 billion barrels had been drawn primarily from onshore commercial inventories since the current Middle East crisis began.
He estimated that only about 10% or less of remaining commercial inventories are realistically available to the market, with the rest constrained by operational needs, minimum stock requirements and other limitations.
Oil sitting in pipelines, tank bottoms or storage needed to maintain refinery and distribution operations cannot simply be emptied without affecting the wider system.
Governments also require minimum levels of emergency reserves for national security and supply disruptions.
The International Energy Agency is now accelerating another release of oil and refined products as diesel markets remain particularly tight.
IEA member governments agreed Wednesday to bring approximately 100 million barrels of previously pledged crude and diesel stocks to market as quickly as possible. The agency said about 325 million barrels have already been released under a 400-million-barrel collective action announced in March.
The remaining releases would bring roughly another 100 million barrels into the market because some member countries have exceeded their original commitments.
That means the latest action is largely an acceleration of previously pledged volumes rather than an entirely new 100-million-barrel emergency intervention.
Nasser said the difficulty of assembling even that amount demonstrated how tight available inventories have become.
“It took a lot of negotiations, but it is 100 million,” Nasser said. “Inventories are reaching a stress level. Only 10% or less is available, that’s why they struggle with 100 million barrels.”
The IEA said its members still hold approximately 1.1 billion barrels of publicly controlled emergency oil stocks, including more than 200 million barrels of diesel, and could release additional supplies if necessary.
Global petroleum demand, however, remains enormous.
World oil consumption is running at roughly 102 million barrels per day, according to the IEA, meaning even a 100-million-barrel release amounts to less than one day of global demand.
Chevron Chief Executive Mike Wirth said the disappearance of excess inventory has made the market structurally more fragile and raised the price level at which oil is likely to find support.
Industry executives told the London conference that the disruption could extend well into 2027 because inventories cannot be replenished quickly while producers are simultaneously trying to satisfy current consumption.
Refilling storage could take years if demand remains high and global production continues to face geopolitical constraints.
The importance of Middle Eastern exports has consequently increased.
Vitol Chief Executive Russell Hardy said roughly 12 million barrels per day of crude and 2 million barrels per day of refined petroleum products have recently been leaving the Middle East.
Those flows are essential to keeping the market balanced heading into winter, he said.
The world is relying on seaborne barrels “to keep things in balance as we go through winter, because there aren’t any more inventories to drain in the West,” Hardy said.
Any significant interruption to those exports could therefore have an outsized impact because buyers no longer have the same ability to compensate by drawing from storage.
That vulnerability is reflected in current prices.
Brent crude was trading above $100 per barrel Wednesday as markets weighed Middle East supply risks, Ukrainian attacks on Russian energy infrastructure and a developing Gulf of Mexico storm.
U.S. commercial crude inventories also fell by 3.2 million barrels in the latest weekly data, dropping to 424.1 million barrels.
Distillate inventories, which include diesel and heating oil, remain about 12% below their five-year seasonal average.
The United States’ emergency reserves are under similar pressure.
The Strategic Petroleum Reserve stood near 283 million barrels in early October, its lowest level since October 1982.
The Energy Department announced Sept. 29 that it would proceed with an exchange of up to 40 million barrels of SPR crude as part of the broader international response to global supply disruptions.
That release is part of a previously announced U.S. commitment totaling 172 million barrels under the IEA-coordinated program.
The shrinking reserve has raised questions about how much flexibility Washington would have if another major supply emergency developed before inventories could be rebuilt.
At the same time, global refiners are confronting shortages of diesel and other petroleum products.
The Group of Seven agreed last week to make approximately 100 million barrels of crude and diesel available over the coming months, with the United States, Europe and Asian countries contributing supplies.
The move temporarily eased fuel prices but does not solve the underlying imbalance if supply disruptions continue.
Countries and energy companies are therefore looking at ways to increase storage capacity.
Nasser said demand for additional inventory capacity is rising globally.
Kuwait Petroleum Corporation Chief Executive Shaikh Nawaf Al-Sabah said his company plans to expand storage both inside Kuwait and at overseas refining operations.
The concern extends beyond crude oil.
Natural gas inventories have also been depleted by geopolitical disruptions and heavy consumption.
Petronas Chief Executive Tengku Muhammad Taufik warned that a severe winter could produce a “bloodbath” in gas markets during the first quarter of 2027 if storage levels fall toward operational minimums.
The depletion of both oil and gas inventories is changing how energy executives assess market risk.
Stockpiles traditionally act as shock absorbers, allowing governments, refiners and traders to compensate temporarily when production unexpectedly declines.
As those buffers shrink, relatively modest supply disruptions can have larger effects on prices because there is less stored energy available to fill the gap.
The result is a market increasingly dependent on continuous production and uninterrupted tanker traffic, particularly from the Middle East.
Executives said rebuilding inventories will require production to exceed consumption for an extended period, something that becomes difficult when demand remains high and geopolitical disruptions continue removing barrels from the market.
For now, the immediate concern is winter.
With Western inventories already depleted, global markets will depend heavily on continued Middle Eastern exports, functioning refineries and the absence of another major geopolitical or weather-related supply disruption.
The oil is not literally disappearing from global storage, but much of what remains cannot readily be released.
That distinction is what has energy executives worried: the headline inventory number may still be measured in billions of barrels, but the portion capable of cushioning the next shock is becoming much smaller.
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