How much oil can cushion another Middle East supply shock?

Global oil inventories have fallen to their lowest level in nearly a decade as the Iran war and disruption to shipping through the Strait of Hormuz drain the market’s supply cushion.

A brief recovery last month in Middle Eastern oil exports has faltered amid renewed attacks, complicating efforts to replenish stocks. 

Saudi Aramco chief executive Amin Nasser warned on Oct. 5 that the world had lost nearly 3 billion barrels of gross oil supply since the conflict began in late February, equivalent to roughly half the crude and oil products that would normally have moved through the Strait of Hormuz over the same period. 

“The system is already straining,” Nasser told the Energy Intelligence Forum in London. “And, with precious little else the world can turn to, the supply resilience cushion is scarily thin.”