🛢What happens when world’s ‘frighteningly thin’ oil reserves run out?
 
Saudi Aramco CEO Amin Nasser says the planet is experiencing “the most severe energy supply crisis of [his 44+ year] career,” and that “the supply resilience buffer” is “alarmingly thin,” with 1B+ barrels withdrawn from reserves since the start of the Iran war and ~3B barrels lost due to shipping chokepoint blockades and production shutdowns.

Of the ~6B barrels of oil theoretically left in inventory, 90%+ are trapped in pipelines or at the bottom of storage tanks and physically unusable, with the 1B+ in pulled reserves the “last major tool in the box” available to nations to absorb price shocks, Nasser fears.

As if to confirm his point, the G7 bloc’s October 2 release of 100M barrels’ worth of oil and petroleum reserves onto the market had almost no impact on diesel, jet fuel and gasoline prices, which remain at or near record highs.

Global manufacturing giant China, which helped stave off disaster in the spring and summer by dramatically scaling back crude purchases and tapping massive reserves, resumed purchases in July, adding additional pressure on demand.

With reserves plummeting and Northern Hemisphere countries preparing for the heating season, observers fear stockpiles could run out completely by spring 2027, after which countries will start transitioning to rationing.

Nasser says even if the Hormuz crisis ends tomorrow, rebuilding reserves would take 2+ years, meaning years more of high prices, at a minimum.
 
Practical implications
 
🔴 For the US: high oil prices mean “higher everything prices,” meaning more inflation, higher interest rates and borrowing costs, and potentially, a stock, bond or housing market crash, or money-printing crisis.

🔴 US allies in Europe and Asia, which have no substantive oil output of their own, would face an immediate and catastrophic economic, industrial, logistical and societal collapse, and potential wars of aggression to try to seize the oil capacity of other countries.

🔴 For other regions: sovereign bankruptcies and grid collapses, severe food crises, and emigration in search of less hard-hit areas.

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