ABU DHABI — The world has eroded its supply buffers by draining nearly 1 billion barrels from global inventories since the US–Israeli war on Iran disrupted shipping through the Strait of Hormuz, the chief executive of Abu Dhabi's state-owned oil company ADNOC said on Monday at the ADIPEC conference, Reuters reported. Yaani: nearly 1 billion barrels means roughly 100 crore barrels drawn out of storage.

Source: Reuters via BusinessWorld

Diesel stockpiles in some areas are at 35-year lows for this time of the season, while others face a liquefied natural gas supply gap of 600 billion cubic feet, Sultan Al Jaber added. Prices of diesel in many markets have surged to record highs on the wartime disruptions, posing inflation and cost-of-living threats to governments and consumers, he said.

"We need expanded strategic storage, larger stockpiles of products, and flexible refining capacity closer to consumer markets," Al Jaber said. "Infrastructure must be built before it is needed and enabled by advanced logistics." Bloomberg reported the same call at the opening of ADIPEC: greater capacity to store oil and produce fuels closer to consumers, and transport routes adapted to get supply to users.

Source: Bloomberg via Business Mirror

The international benchmark Brent is trading around $110 a barrel, up about 50% from February, just before the war began at the end of that month. The cost of shipping and logistics has risen to 30% of the cost of a barrel, from 5% before the Iran war, Al Jaber said.

Governments have already been raiding emergency reserves. Last month the International Energy Agency agreed to release more than 20 million barrels of diesel to the market, along with any oil remaining from a record emergency reserves release pledged in March. Saudi Aramco chief Amin Nasser said last month that fewer than 6 billion barrels of commercial inventories remained — yaani about 600 crore barrels — with the vast majority not practically available.