Saudi Aramco Warns of Global Fuel Stocks Heading Towards Critical Levels

Geopolitical tensions in the Middle East between the United States and Iran are once again sparking major concerns in the global energy market. Saudi oil giant Saudi Aramco has warned that world fuel reserves could potentially reach “very critical” levels if the closure of the Strait of Hormuz continues into the summer.

Aramco’s Chief Executive Officer, Amin Nasser, stated that stocks of petrol and aviation fuel are declining at the fastest rate since the Iran conflict erupted and the world’s main energy shipping route was disrupted.

Nasser revealed that the world has lost a cumulative supply of around 1 billion barrels of oil since the Iran war began. Moreover, every week the Strait of Hormuz remains closed, an additional 100 million barrels are lost from the global market.

“The only buffer available at present is onshore stocks,” but they have “thinned significantly,” Nasser said, quoting the Financial Times on Tuesday (12/5/2026).

The Strait of Hormuz, a vital route that typically carries about one-fifth of the world’s oil supply, has seen disruptions forcing several Asian countries to cut energy consumption, while Western nations are more aggressively tapping their strategic and commercial reserves.

For context, oil prices have fluctuated wildly over the past 10 weeks, surging to US$126 per barrel at the end of April before dropping back to around US$100 per barrel, in line with signals from the Trump administration that they are seeking a long-term resolution to the conflict.

JPMorgan has also warned that commercial oil stocks in advanced economies could approach operational pressure limits by early June. This situation is seen as narrowing the global market’s ability to cover Middle East supply shortages.

JPMorgan’s global commodities strategy head, Natasha Kaneva, believes this could force a deal between the US and Iran, despite ongoing disagreements between the White House and Tehran over peace agreement plans. The alternative is a sharp further rise in refined fuel prices, potentially triggering global inflation.

“Our conclusion is that, one way or another, the strait will be reopened in June,” she stated.

However, she cautioned that the market will only believe a clear and credible announcement, verified and confirmed by both parties.

“The next phase of this shock may not look like a traditional crude oil price spike, but more like a refining and end-user fuel crisis,” she added.

Nevertheless, Nasser believes the market is still too optimistic about the amount of oil available in global storage. He emphasised that much of the stock cannot be immediately used because it is locked in operational needs such as pipeline fills and minimum storage tank levels.

“Aggregate global inventory levels are not an accurate reflection of the tightness in the physical market we are seeing right now,” Nasser said.

Meanwhile, the International Energy Agency (IEA) is now coordinating the largest release of strategic oil reserves in history to mitigate the impact of the Iran war. However, the capacity to release those reserves remains limited.

“In Europe and the US, the maximum that can be drawn from there is 2 million barrels per day,” Nasser said.

Aramco is also considering expanding its oil export capacity through the Yanbu port on the Red Sea. This move signals Saudi Arabia’s desire to reduce reliance on oil exports via the increasingly vulnerable Strait of Hormuz amid geopolitical conflicts.

Because if the Strait of Hormuz remains closed until mid-June, the oil market could remain unstable until next year, he said on Monday.

“The longer the supply disruption continues, even just a few more weeks, it will take far longer for the oil market to return to balance and stability,” Nasser stated.

Although Aramco could reach its sustainable maximum production level of 12 million barrels per day if the strait reopens, Nasser said other countries would struggle to ramp up production quickly.

Aramco’s profits in the first three months of this year rose due to higher oil prices and the ability to redirect oil exports from the Gulf to its Red Sea ports. This effort successfully offset the overall decline in exports since March.