Saudi Aramco CEO expects oil markets to tighten 

Reuters/Ahmaed Yosri

• Stockpiles shrinking says Nasser
• Opec: demand to rise 2.2m bpd
• Possible tanker shortage

Saudi Aramco expects tighter oil markets due to growing crude demand and shrinking stockpiles, its CEO Amin Nasser has said.

Nasser believes that the disruptions in the Red Sea will not affect global markets in the short term.

However, an extension of the crisis would result in a shortage of tankers due to longer travel time and supply delays, he told Reuters in an interview on the sidelines of this week’s World Economic Forum in Davos.

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Oil prices were slightly up despite growing tensions in the Middle East. Global crude oil benchmark Brent traded over $78 a barrel while US WTI rose above $73.

The US and its allies launched another round of airstrikes on Yemen’s Houthis overnight, as the Iran-backed group continued its attacks on shipping in the Red Sea.

Pakistan launched targeted strikes on Iran after Tehran carried out similar attacks on Pakistan the day before.

Vessels have been pausing or diverting from the area, choosing a longer route around Africa, which adds 10-14 days to the journey. The diversions have yet to cause strong increases in freight rates or commodities prices, according to data and analytics company Kpler.

Aramco can bypass the Bab Al Mandab via a pipeline connecting its eastern oil facilities with its western coast, Nasser said.

He predicted growth in oil demand of around 1.5 million barrels per day (bpd) at 104 million bpd in 2024, after growth of 2.6 million bpd in 2023.

This was less optimistic than Opec’s latest forecast. The Saudi-led organisation of oil exporting countries saw relatively substantial growth in oil demand in 2024 and a solid increase in 2025.

It said in a monthly report that world oil demand would rise by 2.2 million bpd this year and 1.8 million bpd in 2025 to 106.21 million bpd. 

Nasser said global stockpiles depleted by 400 million bpd in the last two years to the lowest five-year average level. He told Reuters that Opec’s spare capacity was the main source of additional supply to meet rising demand.

“The only card available today is the spare capacity, which is around 3.5 percent globally. And as demand picks up, you will erode that spare capacity unless there is additional supply,” Nasser said.

Opec expects non-Opec production to grow by 1.3 million bpd in 2024, slightly lower than previously, mostly from the US, Canada, Guyana, Brazil, Norway and Kazakhstan.

It forecasts unchanged non-Opec liquids supply growth in 2025, mainly due to production by the US, Brazil, Canada, Norway, Kazakhstan and Guyana. 

Opec anticipates an increase in global economic growth of 2.8 percent in 2025 from 2.6 percent in 2024, partially thanks to the interest rate peak.

China, the Middle East and India will be responsible for the increase in oil consumption, according to the organisation.