Aramco Chief: Oil demand to surge by 3 million barrels per day as normalcy returns

RIYADH — President and CEO of Saudi Aramco Amin Nasser predicted that a return to normalcy in the region would drive an increase in oil demand of approximately 3 million barrels per day. This would comprise 2 million barrels per day in additional consumption and another 1 million barrels per day to replenish stockpiles depleted by countries during the crisis.In an interview with Al Arabiya Business, Nasser said the current crisis, triggered by the war in the region, was unprecedented in its impact on markets. He noted that approximately 3 billion barrels of supply had been lost since the crisis began, at a time when global inventories were already below the five-year average. The Aramco chief explained that oil prices could have surged to significantly higher levels had it not been for releases from global strategic reserves, a decline in China's seaborne oil imports, and the role of the East-West pipeline in sustaining supply flows. He pointed out that China's seaborne oil imports fell from approximately 11 million barrels per day to between 5 million and 6 million barrels per day in June, helping to ease pressure on markets. Regarding oil export routes, Nasser said Aramco was working to expand the capacity of the East-West pipeline from its current 7 million barrels per day to 10 million barrels per day, while also exploring additional export routes. He noted that engineering work on these projects began in the early days of the crisis. He added that the company was working with its partners to double its storage capacity outside the Kingdom, particularly in Asia, its largest market, as part of efforts to enhance supply flexibility. Nasser further stated that all gas expansion projects were progressing according to schedule, including the Jafurah project, whose first phase was completed by the end of 2025, while the second phase is expected to be completed in 2027 without delay. He said that Aramco aims to increase gas production by 80 percent by 2030 compared with 2021 levels. This expansion will help replace liquid fuels used for electricity generation with gas, freeing up approximately one million barrels of oil per day for export. Nasser stated that the company was studying future gas export opportunities in coordination with the Ministry of Energy. However, its immediate priority remains meeting domestic market demand and supporting industrial expansion in the Kingdom, alongside its international investments in liquefied natural gas (LNG) projects through MidOcean. Regarding supply chains, Aramco chief explained that more than 90 percent of the materials required during the crisis were sourced from the local market, while local content at Aramco reached approximately 70 percent. These achievements helped the company sustain its operations despite logistical challenges. He noted that Aramco generated added value exceeding $11 billion through technology and artificial intelligence applications between 2023 and 2025. The company anticipates generating additional value ranging between $2 billion and $4 billion annually in the coming years. Nasser also explained that Aramco's oil extraction costs had remained close to $3 per barrel for nearly 20 years, despite global inflation, thanks to technological advancements and improved operational efficiency.