Energy Intelligence Forum
SPEECH: Energy Intelligence Forum, Remarks by Amin H. Nasser Aramco President & CEO
Global Today
Amin H. Nasser, Aramco President & CEO
Energy Security and Resilience In New & Far From Normal Times
Thank you, Alex, and good morning, Ladies and Gentlemen.
Over the past five decades, I have seen many things that seemed improbable until they happened.
I remember 2008, when oil prices fell almost 80% during the financial crisis.
I will never forget 2019, when my phone rang before dawn with news that our facilities at Abqaiq and Khurais had been attacked.
And who could forget 2020, when the world went into Covid lockdown?
But this year has been another level.
The world always knew that the Strait of Hormuz could be disrupted.
Few expected the near-closure of the world’s most critical energy artery to last so long, or its impact to spread so widely.
It has caused the most serious energy supply shock in my career.
It has exposed how deeply energy security, economic security, and geopolitical events are connected.
And while it is too early to say what the full impact will be, we have clearly entered new and far from normal times.
After all, oil and gas are not just tradable commodities.
They are the lifeblood of modern civilization.
Their reach extends from the fertilizers that help feed us and medicines that heal us, to the clothes we wear, the materials that build our cities, and the phones that connect us.
Today, petrochemicals are used in the production of more than 9 out of 10 manufactured goods.
Renewable energy will play an important role when produced competitively.
But oil and gas are so deeply embedded in the global economy that the gears are grinding far beyond energy markets.
Ocean freight has been hit hard, supply chains are tight, people worry about inflation and the availability of essentials.
And with shortages of aluminum, sulfur, helium, and petrochemicals, solar, wind, and EVs are not immune either.
Everything is connected.
Even bond markets are feeling the barrel’s pinch.
Existing buffers have cushioned the blow and bought time, but they are finite.
And while the squeeze on crude is serious, refined fuel prices have risen even more sharply.
Emergency reserves might buy us a winter. They cannot fix long-term supply.
Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify.
Even then, replenishing inventories while meeting demand could take up to two years.
What matters is whether the right energy can reach the right place, in the right form, at the right time.
Because energy security is critical for economic security.
The world entered this crisis with almost 10 billion barrels of global oil stocks, all told.
Since then, nearly 3 billion barrels of gross oil supply has been lost, or roughly half the crude and products that would normally have moved through Hormuz over the same period.
This has been mitigated by more than 1 billion barrels from those stocks.
But most of that came from onshore commercial inventories, which was the last major tool in the box.
And estimates suggest less than 6 billion barrels of commercial inventories remain today, with the vast majority not practically available.
So the system is already straining.
And, with precious little else the world can turn to, the supply resilience cushion is scarily thin.
Supplies must also be affordable.
The IMF has modeled a severe scenario where global economic growth falls to just 2% next year, while inflation rises above 6%.
The longer the disruption continues, the risk of this happening only grows.
And when energy becomes scarce or unaffordable, the most vulnerable suffer hardest and they suffer first.
Indeed, the world has been reminded that no energy source, route, or system is risk-free.
This crisis has raised the risk baseline.
And that higher risk must be matched by deeper resilience, built across multiple layers.
At Aramco, resilience is like a vast, complex jigsaw puzzle, not a single asset or capability.
Our strategic storage globally has proved vital.
Our spare capacity, multiple crude oil grades, domestic gas storage, tanker fleet via Bahri, and one of the strongest balance sheets in the industry add further layers.
So does our local supply chain, which has provided more than 90% of the materials used in asset restoration.
Resilience is core to our design philosophy, guided by “Aramco Standards,” which in many areas go beyond industry requirements.
This means separating our critical facilities; building in backup equipment; planning for maintenance; emergency command and firefighting excellence; rapid damage assessment; and restoring damaged infrastructure at pace.
And we put people at the heart of our resilience, with long-term investments to match.
Individually, none of these measures defines resilience.
Together, they define ours.
Of course, not every system should look like ours.
But every system needs deeper wells of resilience.
There is also the physical reality that half the world’s proven oil reserves are in the Middle East, along with most of its spare production capacity.
Despite the challenges, they are where they are. Period.
Markets can diversify suppliers.
They cannot diversify geology.
The world can reduce dependence on chokepoints.
But our region’s strategic importance is set to grow, as the other resource bases mature, and new ones are potentially harder to find and less economically competitive.
Multiple export routes, which can be adapted in real time, already reduce the risk that a single chokepoint can paralyze the system.
At Aramco, we are studying additional routes for crude exports, while exploring more overseas storage to help cover short-term disruptions.
In short, Middle East oil and gas supplies remain central to any credible global energy resilience strategy, including here in Europe.
Geology and geography have seen to that.
For the whole world, and Europe in particular, this is a compelling opportunity to re-assess oil policies to ensure they remain aligned with the strategic goal of long-term energy security.
Because energy security and resilience is a shared responsibility between producers and consumers.
Ultimately, their resilience is our resilience, and our resilience is theirs.
And this crisis is much more than an energy supply shock in Hormuz.
It has been amplified by widespread attacks on land, including Aramco facilities, and developments in the Gulf of Oman, the Red Sea, and the Bab al-Mandab Strait.
While the Kingdom is capable and confident, and its systems are coping, no country should face this alone.
The international community must stand together to safeguard the free flow of energy and goods.
Because every attack comes with a global price: weaker energy security, greater market disruption, lives and livelihoods on the line.
That is why oil and gas infrastructure is not a cost to be minimized or avoided; it is a collective necessity for producers and consumers alike.
We should share lessons, and align strategies to anticipate disruptions, absorb shocks, and adapt more quickly together.
We can collaborate on emergency response; better supply planning; refinery and petrochemicals flexibility; joint stockpiling; and long-term relationships.
And stronger finances, supply chains, and cybersecurity are a must.
Technology offers immense benefits, but also poses serious risks.
Open data such as satellite imagery and shipping logs are increasingly being weaponized against infrastructure and tankers.
Tools of transparency should not become ammunition for aggression.
And as the risk baseline has changed, so must our investment mindset.
Let’s end the era of cyclical under-investment, and invest in the sources and systems the world still needs.
Let’s start thinking about energy security in decades, not quarters.
And let’s assign an economic value to resilience at last.
Resilience and growth are not competing priorities.
Disciplined investment through the cycles strengthens both.
So resilience deserves to be integral to judging a company’s performance, alongside earnings, shareholder returns, and ESG.
When the chips are down, resilience protects the foundations on which they all depend.
Ladies and Gentlemen, this crisis has finally exposed the false choice between energy security, affordability, and sustainability.
They are inseparable, and the future energy system must be built on all three.
Even in these far from normal times, Middle East oil and gas remain central to that system for decades to come.
Strengthening the resilience of these vital supplies is therefore a global strategic necessity.
That is not looking back; it is planning ahead.
Aramco’s resilience was not built overnight.
It was there when we needed it because previous generations had the foresight to build, maintain, and strengthen it.
Now it is our generation’s turn to make the choices that future generations may one day depend on.
And we have no time to lose.
Thank you.
Over the past five decades, I have seen many things that seemed improbable until they happened.
I remember 2008, when oil prices fell almost 80% during the financial crisis.
I will never forget 2019, when my phone rang before dawn with news that our facilities at Abqaiq and Khurais had been attacked.
And who could forget 2020, when the world went into Covid lockdown?
But this year has been another level.
The world always knew that the Strait of Hormuz could be disrupted.
Few expected the near-closure of the world’s most critical energy artery to last so long, or its impact to spread so widely.
It has caused the most serious energy supply shock in my career.
It has exposed how deeply energy security, economic security, and geopolitical events are connected.
And while it is too early to say what the full impact will be, we have clearly entered new and far from normal times.
After all, oil and gas are not just tradable commodities.
They are the lifeblood of modern civilization.
Their reach extends from the fertilizers that help feed us and medicines that heal us, to the clothes we wear, the materials that build our cities, and the phones that connect us.
Today, petrochemicals are used in the production of more than 9 out of 10 manufactured goods.
Renewable energy will play an important role when produced competitively.
But oil and gas are so deeply embedded in the global economy that the gears are grinding far beyond energy markets.
Ocean freight has been hit hard, supply chains are tight, people worry about inflation and the availability of essentials.
And with shortages of aluminum, sulfur, helium, and petrochemicals, solar, wind, and EVs are not immune either.
Everything is connected.
Even bond markets are feeling the barrel’s pinch.
Existing buffers have cushioned the blow and bought time, but they are finite.
And while the squeeze on crude is serious, refined fuel prices have risen even more sharply.
Emergency reserves might buy us a winter. They cannot fix long-term supply.
Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify.
Even then, replenishing inventories while meeting demand could take up to two years.
What matters is whether the right energy can reach the right place, in the right form, at the right time.
Because energy security is critical for economic security.
The world entered this crisis with almost 10 billion barrels of global oil stocks, all told.
Since then, nearly 3 billion barrels of gross oil supply has been lost, or roughly half the crude and products that would normally have moved through Hormuz over the same period.
This has been mitigated by more than 1 billion barrels from those stocks.
But most of that came from onshore commercial inventories, which was the last major tool in the box.
And estimates suggest less than 6 billion barrels of commercial inventories remain today, with the vast majority not practically available.
So the system is already straining.
And, with precious little else the world can turn to, the supply resilience cushion is scarily thin.
Supplies must also be affordable.
The IMF has modeled a severe scenario where global economic growth falls to just 2% next year, while inflation rises above 6%.
The longer the disruption continues, the risk of this happening only grows.
And when energy becomes scarce or unaffordable, the most vulnerable suffer hardest and they suffer first.
Indeed, the world has been reminded that no energy source, route, or system is risk-free.
This crisis has raised the risk baseline.
And that higher risk must be matched by deeper resilience, built across multiple layers.
At Aramco, resilience is like a vast, complex jigsaw puzzle, not a single asset or capability.
Our strategic storage globally has proved vital.
Our spare capacity, multiple crude oil grades, domestic gas storage, tanker fleet via Bahri, and one of the strongest balance sheets in the industry add further layers.
So does our local supply chain, which has provided more than 90% of the materials used in asset restoration.
Resilience is core to our design philosophy, guided by “Aramco Standards,” which in many areas go beyond industry requirements.
This means separating our critical facilities; building in backup equipment; planning for maintenance; emergency command and firefighting excellence; rapid damage assessment; and restoring damaged infrastructure at pace.
And we put people at the heart of our resilience, with long-term investments to match.
Individually, none of these measures defines resilience.
Together, they define ours.
Of course, not every system should look like ours.
But every system needs deeper wells of resilience.
There is also the physical reality that half the world’s proven oil reserves are in the Middle East, along with most of its spare production capacity.
Despite the challenges, they are where they are. Period.
Markets can diversify suppliers.
They cannot diversify geology.
The world can reduce dependence on chokepoints.
But our region’s strategic importance is set to grow, as the other resource bases mature, and new ones are potentially harder to find and less economically competitive.
Multiple export routes, which can be adapted in real time, already reduce the risk that a single chokepoint can paralyze the system.
At Aramco, we are studying additional routes for crude exports, while exploring more overseas storage to help cover short-term disruptions.
In short, Middle East oil and gas supplies remain central to any credible global energy resilience strategy, including here in Europe.
Geology and geography have seen to that.
For the whole world, and Europe in particular, this is a compelling opportunity to re-assess oil policies to ensure they remain aligned with the strategic goal of long-term energy security.
Because energy security and resilience is a shared responsibility between producers and consumers.
Ultimately, their resilience is our resilience, and our resilience is theirs.
And this crisis is much more than an energy supply shock in Hormuz.
It has been amplified by widespread attacks on land, including Aramco facilities, and developments in the Gulf of Oman, the Red Sea, and the Bab al-Mandab Strait.
While the Kingdom is capable and confident, and its systems are coping, no country should face this alone.
The international community must stand together to safeguard the free flow of energy and goods.
Because every attack comes with a global price: weaker energy security, greater market disruption, lives and livelihoods on the line.
That is why oil and gas infrastructure is not a cost to be minimized or avoided; it is a collective necessity for producers and consumers alike.
We should share lessons, and align strategies to anticipate disruptions, absorb shocks, and adapt more quickly together.
We can collaborate on emergency response; better supply planning; refinery and petrochemicals flexibility; joint stockpiling; and long-term relationships.
And stronger finances, supply chains, and cybersecurity are a must.
Technology offers immense benefits, but also poses serious risks.
Open data such as satellite imagery and shipping logs are increasingly being weaponized against infrastructure and tankers.
Tools of transparency should not become ammunition for aggression.
And as the risk baseline has changed, so must our investment mindset.
Let’s end the era of cyclical under-investment, and invest in the sources and systems the world still needs.
Let’s start thinking about energy security in decades, not quarters.
And let’s assign an economic value to resilience at last.
Resilience and growth are not competing priorities.
Disciplined investment through the cycles strengthens both.
So resilience deserves to be integral to judging a company’s performance, alongside earnings, shareholder returns, and ESG.
When the chips are down, resilience protects the foundations on which they all depend.
Ladies and Gentlemen, this crisis has finally exposed the false choice between energy security, affordability, and sustainability.
They are inseparable, and the future energy system must be built on all three.
Even in these far from normal times, Middle East oil and gas remain central to that system for decades to come.
Strengthening the resilience of these vital supplies is therefore a global strategic necessity.
That is not looking back; it is planning ahead.
Aramco’s resilience was not built overnight.
It was there when we needed it because previous generations had the foresight to build, maintain, and strengthen it.
Now it is our generation’s turn to make the choices that future generations may one day depend on.
And we have no time to lose.
Thank you.
