Saudi Aramco Chief Executive Officer Amin Nasser stated Monday that global oil stockpiles have become "scarily thin," falling to less than 6 billion barrels from approximately 10 billion at the start of the U.S.-Iran conflict. Only about 10% of these reserves are practically available due to technical restrictions, intensifying pressure on crude supplies.

Speaking at the Energy Intelligence Forum in London, Nasser warned that until the Strait of Hormuz fully reopens, market pressure will remain severe. The International Energy Agency reported that more than 10 million barrels a day of Gulf output remained shut in during August. Global observed inventories dropped another 95 million barrels that month, bringing the total decline since February to 507 million barrels.

Governments deploy strategic reserves

To address the deficit, the Group of Seven agreed to release up to 100 million barrels over four months. The agreement prioritizes a "frontloaded substantial diesel release" and removes potential U.S. export bans on diesel, a critical supply line for Europe which sources over half its imports from the U.S.

French President Emmanuel Macron described the discussions as constructive rather than threatening. Meanwhile, U.S. President Donald Trump intends to complete a full 172-million-barrel drawdown from the Strategic Petroleum Reserve, which currently holds 283 million barrels, covering roughly two weeks of domestic consumption. The administration is also seeking bids for up to 40 million barrels with premium return terms.

IEA to finalize release mechanics

The International Energy Agency is expected to decide the specific details of the G7 diesel and oil stock release at its board meeting scheduled for October 14-15. This decision will operationalize the previously announced agreement to release up to 100 million barrels, clarifying the timing and distribution mechanisms for the strategic reserve drawdowns.

Refined fuel margins expand sharply

Nasser noted that refined fuel prices have risen even more sharply than crude. IEA data indicates Gulf exports of refined products and LPG remain nearly 60% below February levels, representing a loss of 3.7 million barrels a day. Combined net diesel and gasoil exports from the Gulf and Russia are 1.6 million barrels a day lower than pre-war levels.

U.S. diesel prices surpassed $200 a barrel in early September, marking a 94% increase from prewar levels. In comparison, ICE Brent futures rose about 45% to roughly $105. This divergence favors refiners with high distillate output and non-Gulf crude exposure.

What the numbers show

The data reveals a structural divergence between upstream and downstream markets. While crude inventories have dropped significantly, the scarcity of refined products is more acute. The 94% rise in diesel prices against a 45% rise in Brent crude highlights a widening crack spread. This suggests that logistical bottlenecks in refining capacity and product distribution are exerting greater pricing power than raw material availability alone.

Refiners such as Valero Energy Corporation, Marathon Petroleum Corporation, and Phillips 66 benefit from this spread as they operate without direct exposure to Persian Gulf transit lanes. Marathon Petroleum reported average utilization of 95% across its Mid-Continent and Gulf Coast footprint, isolating it from surging maritime tanker rates.

However, macro risks persist. The IEA forecasts industrial demand destruction risk at 2.5 million barrels a day in 2025. Additionally, any diplomatic breakthrough could rapidly deflate refining cracks. Until commercial flows normalize, the global refining complex remains stretched to its operational limit.

Shell CEO stated that Middle East oil flows are near 80% of prewar levels, according to a Bloomberg report on October 6, 2026. This assessment comes as ship tracker Kpler estimated crude exports from the region rose above pre-conflict levels, reaching 19.5 million to 22.5 million barrels per day on September 24 and September 27 through September 29.

The divergence between the executive's estimate and the tracker's provisional data highlights uncertainty in supply visibility during escalating tensions. Kpler’s figures include volumes moving through the Strait of Hormuz and the Red Sea, plus shipments from export terminals and ship-to-ship activity in the Gulf of Oman.

Shipping data shows surge in oil movement

According to a Reuters report citing provisional estimates from Kpler, the surge compares with an average of roughly 18 million bpd from March 2025 through February before fighting began. Kpler's seven-day moving average for crude exports stood at about 18.5 million bpd on October 1.

Broader seaborne volumes also remained elevated. Crude, refined products, chemicals, and other non-gas liquids averaged about 22.4 million bpd in the seven days ending September 30, based on Kpler figures. The data does not capture ships that may have crossed with AIS tracking switched off. Notably, Treasury Secretary Scott Bessent had said last week that Iran had loaded "zero" barrels of oil due to U.S. economic restrictions.

Attacks on ships escalate

According to the United Kingdom Maritime Trade Operations (UKMTO) agency, multiple incidents have occurred since September 30 in the Strait of Hormuz and surrounding waters. UKMTO reported on Monday that multiple explosions were sighted in close proximity, about 60 nautical miles south of Al Mukha, Yemen (roughly 69 miles), in addition to a tanker being struck in the Strait of Hormuz on October 4.

The attacks come as Iranian Security Chief Mohsen Rezaee pushed back against Donald Trump's claims that Iran was close to surrendering to the U.S. Iran's Supreme Leader Ayatollah Mojtaba Khamenei also said that heavy blows suffered by the U.S. at the hands of Tehran will eventually force it out of the Middle East.

Oil prices and fuel costs

West Texas Intermediate (WTI) crude futures contracts expiring in November 2026 slipped 1.32% to $89.91. Brent futures contracts ending in November were also down 0.79% to $101.44 at press time.

During pre-market trading on Monday, United States Oil Fund slipped 1.63% to $145, while ProShares Ultra Bloomberg Crude Oil was down 0.97% to $53.89.

The national average gas price in the U.S. continued to fall, with data from the American Automobile Association (AAA) on Monday showing the national average at $4.3653/gallon. The national average price of diesel remained above $6/gallon at $6.3207.