Oil Reserves Are Draining At A Frightening Rate

By Kristi Eckert | 7 months ago

oil reserves

It is no secret that the pandemic has caused a major strain on the infrastructure of global commerce across all industries. The pandemic-induced tension that has caused most products to be in short supply and prices to skyrocket comes amidst warnings of an impending global energy crisis. According to Bloomberg, the world’s largest oil supplier is now cautioning that global oil reserves are dipping dangerously low. 

Chief Executive Officer Amin Nasser of Saudi Aramco emphasized that oil levels are a “…huge concern” and that “The spare capacity is shrinking.” Nasser said that the situation could become even more critical if commercial air traffic increases next year. The current shortages in oil reserves that the world has been experiencing are a result of slowed production during the Covid-19 lockdowns as well as the supply chain bottlenecks that also came out of halts in the production and movement of goods during the lockdowns.

Gas prices are currently sitting at a seven-year high and have been continuously rising with no signs of slowing down any time soon. Nasser emphasized the extreme hike in crude prices this year with some barrels selling for as much as $85 apiece, which is a shocking 70% higher than what prices were this time last year. Nasser was adamant that the world’s oil reserves will be depleted if there is not a collective effort to ramp up production. Europe’s current risk of running out of oil is imminent, with some predicting complete depletion as early as this winter. Currently, Aramco is investing billions of dollars in capital in order to increase its production rates. However, their output is not projected to fully increase from 12 to 13 million barrels a day until 2027. 

While Nasser’s comments are alarming, many Wall Street banks as well the OPEC+ are not showing as much concern. Even though the current oil reserves situation has deeply affected a world dependent on fossil fuel, those industry experts are predicting the situation to largely be alleviated by the latter half of 2022. Many of the largest players in the oil business have already met to discuss different strategies to help boost production rapidly and refill the oil reserves.

It still remains in question whether or not any of the predictions put out by the oil industry experts regarding the world’s oil reserves will come to pass. The outcome will inevitably reveal itself in the coming months and years. However, many individuals across the world, particularly in the United States, are not waiting to find out what that outcome will be. Environmental experts have spoken for decades about the finiteness of fossil fuels and the world’s over-reliance on them. Now many are taking heed and adopting a clean energy approach by purchasing electric vehicles. Even Saudi Arabia, the oil capital of the world, has pledged to decrease their dependency on oil and have set goals to reach by 2030. The Middle Eastern nation has partnered with the Public Investment Fund in order to turn what was once a massive oil rig operation into a one-of-a-kind oil theme park.