A further emergency release of crude oil and refined products risks weakening the inventory buffer available to absorb future supply disruptions, OilPrice.com reported. The International Energy Agency announced another 100 million barrels of diesel, petrol and crude after consultations with the G7, as part of a 400-million-barrel release programme unveiled in March to address the Hormuz supply squeeze.
US strategic stocks stood at 331.2 million barrels at the beginning of October, their lowest level since 1983, following a draw of more than 9 million barrels, according to the report. Those withdrawals form part of a US commitment to release 172 million barrels. OilPrice.com cited experts putting the reserve system’s operational minimum at 250 million-300 million barrels, warning that approaching that range could compromise storage infrastructure as well as reduce emergency response capacity.
The decline extends beyond US government reserves. Citing the IEA’s September monthly oil report, OilPrice.com said worldwide inventories fell by 95 million barrels in August. Cumulative withdrawals since February reached 507 million barrels, equivalent to 2.8 million barrels a day. OECD commercial stocks provided some relief, increasing by 23 million barrels against a 19-million-barrel reduction in strategic holdings.
Aramco chief executive Amin Nasser warned at the Energy Intelligence Forum in London that the remaining supply buffer was severely stretched. According to OilPrice.com, he said rebuilding depleted stocks could take up to two years after the Strait of Hormuz reopens. Nasser also said more than 1 billion barrels of crude had been withdrawn since the start of the war involving the United States, Israel and Iran, mostly from commercial inventories.
IEA executive director Fatih Birol nevertheless said member governments retained about 1.1 billion barrels of publicly held emergency stocks, including more than 200 million barrels of diesel. He indicated that the agency was prepared to authorise further releases if needed. OilPrice.com argued that continued withdrawals could heighten concern over how much inventory can be used without impairing storage operations.
Meanwhile, Southeast Asian governments are pursuing stronger stockpiling arrangements as the region struggles to secure affordable fuel. OilPrice.com cited a statement by nine governments, reported by Reuters, supporting national oil storage systems and voluntary regional joint stockpiling. The report noted that dependence on Middle Eastern supplies leaves Asian economies particularly exposed, while high prices complicate efforts to replenish reserves.