Nearly 1 billion barrels of oil have been drained from global inventories since shipping through the Strait of Hormuz was disrupted, ADNOC Chief Executive Sultan Al Jaber said.
Al Jaber delivered the assessment Nov. 2 at the opening of the ADIPEC energy conference in Abu Dhabi, according to Vesti Baku.
Delivery Costs Reshape the Oil Market
The head of the United Arab Emirates’ state oil company said the disruption has sharply reduced the global market’s supply cushion. Shipping and logistics accounted for less than 5% of the cost of a barrel before the disruption but now represent more than 30%, according to ADNOC.
Al Jaber said energy security can no longer be measured only by production volumes because the ability to deliver crude and fuel to consumers has become equally important.
Diesel inventories in some markets have fallen to their lowest seasonal level in 35 years, while other regions face a liquefied natural gas supply gap estimated at 600 billion cubic feet.
Emergency Reserves Released
The International Energy Agency previously agreed to accelerate the release of remaining oil from an emergency reserve package announced in March and place more than 20 million barrels of diesel on the market.
Al Jaber called for expanded strategic storage, larger product stockpiles and flexible refining capacity closer to major consumer markets. The outlook will depend heavily on shipping conditions through the Strait of Hormuz and the duration of the regional conflict.
Source: Vesti Baku. Statement: ADNOC.