In article published by Al Jazeera, Dr. Carole Nakhle, CEO of Crystol Energy, discussed the implications of declining oil inventories, rising transportation costs and supply disruptions amid the ongoing Middle East conflict. Dr Nakhle explained that strategic oil reserves are fulfilling their intended purpose by protecting markets and consumers from extreme price increases. She also cautioned against interpreting withdrawals as a sign of imminent depletion, highlighting the uncertainty surrounding global inventories, particularly China’s substantial but largely undisclosed stocks.
Dr Nakhle further emphasised that geopolitical uncertainty continues to drive shipping, insurance and logistics costs. While improved security conditions could ease these pressures, risk premiums may persist without lasting political settlements. She also highlighted the distinction between crude oil availability and refined product supplies, noting that sufficient crude inventories do not necessarily guarantee adequate diesel supplies. Although Middle Eastern exports could recover relatively quickly, damaged Russian refining infrastructure may take longer to restore, potentially keeping some refined product prices elevated even as crude markets stabilise.
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