Saudi Aramco warns of 18-month recovery for oil inventories after Strait of Hormuz disruption

Saudi Aramco just told the world what energy traders already feared: even if the Strait of Hormuz reopens tomorrow, it will take at least 18 months to refill global oil inventories. That’s not a worst-case scenario. That’s the optimistic one.

During Aramco’s Q2 2026 earnings call on August 4, CEO Amin Nasser laid out the damage in stark terms. The US-Israeli conflict with Iran, which erupted in February 2026, has drained an estimated 2.6 billion barrels from global supply on a cumulative basis. After accounting for offsets like pipeline rerouting and strategic reserve releases, the net loss still clocks in at roughly 1.8 billion barrels.

The numbers behind the shock

To put that 1.8 billion barrel deficit in perspective, refilling it at a rate of 2.1 million barrels per day would take the full 18 months Nasser outlined. Nasser characterized the disruption as “the largest supply shock of oil in history.” The Strait of Hormuz normally handles roughly a fifth of the world’s petroleum consumption.

Aramco’s own production tells part of the story. Average output in Q2 2026 fell to 9.5 million barrels per day, a steep decline from 12.8 million barrels per day during the same quarter a year earlier. That’s a drop of more than 25%.

And yet the company is making more money than ever. Aramco posted Q2 net profit of $32.69 billion, up 44% year-on-year. When you’re selling fewer barrels but each one fetches $108.10 on average, the margins more than compensate.

Rerouting around the crisis

Aramco hasn’t been sitting idle while the Strait remains contested. The company has pushed its East-West Pipeline to record utilization levels, rerouting crude exports from the Persian Gulf coast to the Red Sea terminal at Yanbu.

Beyond the pipeline, Nasser indicated the company is evaluating an expansion of refining capacity by approximately 2 million barrels per day in western Saudi Arabia. Building out refining on the Red Sea side would reduce Aramco’s dependence on eastward-facing export infrastructure.

What the 18-month timeline means for markets

The 18-month inventory recovery window has immediate implications for crude pricing. Oil markets have already been trading at elevated levels since the conflict began, with Aramco’s realized price of $108.10 per barrel reflecting a world where supply scarcity is the dominant force.

There’s also the question of strategic reserves. Multiple countries tapped their stockpiles in the early months of the conflict, which helped absorb some of the initial shock. But those reserves now need replenishing too, adding another layer of demand on top of the commercial inventory rebuild Nasser described.

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