The war involving the United States, Israel and Iran has led the world to draw nearly 1 billion barrels of oil from its reserves since shipping through the Strait of Hormuz was disrupted on February 28, Adnoc CEO Sultan Al Jaber said on Monday at the ADIPEC conference in the United Arab Emirates.
Al Jaber said diesel inventories in some regions were at their lowest level for this time of year in 35 years. Other areas face a liquefied natural gas supply shortfall of 600 billion cubic feet, or 17 billion cubic meters, he said.
War-related supply disruptions have pushed diesel prices to record highs in many markets, raising concerns about inflation and the cost of living for governments and consumers. Al Jaber said shipping and logistics costs have risen from 5% of the cost of a barrel before the war to 30%.
He called for expanded strategic storage, larger stocks of refined products and flexible refining capacity closer to consumer markets. Infrastructure, he said, needs to be built before it is needed and supported by advanced logistics.
Brent crude, the international benchmark, was trading at about $110 a barrel, roughly 50% higher than in February, before the war began. Last month, the International Energy Agency agreed to release more than 20 million barrels of diesel, along with all the oil still available from a record emergency reserve release pledged in March to increase supply and curb price rises.
Saudi Aramco CEO Amin Nasser said last month that commercial inventories had fallen below 6 billion barrels, with most of that oil not practically available.
Sources: Folha Mercado.