Saudi Aramco Predicts 18-Month Recovery for Oil Inventories After Strait of Hormuz Disruption

Saudi Aramco has announced that even if the Strait of Hormuz reopens immediately, it will require at least 18 months to replenish global oil inventories. This statement comes amidst ongoing geopolitical tensions, particularly the US-Israeli conflict with Iran, which has resulted in a cumulative loss of approximately 2.6 billion barrels from global supply.

During the company's Q2 2026 earnings call, CEO Amin Nasser described the situation as the "largest supply shock of oil in history." The net loss to supply, after accounting for rerouting and strategic reserve releases, stands at around 1.8 billion barrels. Nasser emphasized that refilling this deficit at a rate of 2.1 million barrels per day would indeed take the full 18 months he outlined.

Aramco's production has also seen a significant decline, with average output dropping to 9.5 million barrels per day in Q2 2026, down from 12.8 million barrels per day in the same quarter the previous year. Despite this decrease in volume, Aramco reported a record net profit of $32.69 billion for Q2, reflecting a 44% year-on-year increase, largely due to higher oil prices.

In response to the disruptions, Aramco has increased utilization of its East-West Pipeline and is considering expanding refining capacity by approximately 2 million barrels per day in western Saudi Arabia. This would help reduce reliance on export routes affected by the ongoing crisis.

The 18-month recovery timeline has significant implications for global oil markets, which have already seen elevated prices due to supply scarcity. The average realized price for Aramco has reached $108.10 per barrel, indicating a market heavily impacted by the current geopolitical climate.