International oil prices are facing a four-pronged assault!

This time, the Houthis did not adopt a rigid, head-on 'fight-to-the-death' strategy. Instead, they first launched a surprise attack on the Bab el-Mandeb Strait and seized the port of Mocha to draw the attention of Yemen’s government forces. Then, employing a feint-and-flank tactic, they staged a frontal assault on Taiz’s main defensive line before circumventing it entirely—executing a rapid penetration maneuver over 100 kilometers in just 36 hours to capture Turba, the critical southern supply hub for Taiz. By cutting off food, water, and other supplies to the defending forces, the Houthis now stand a real chance of forcing Taiz’s surrender. According to foreign media reports, several major tribes along the southern border of Taiz and Lahj provinces have already reached agreements with the Houthis: if they lay down their arms, their property will not be confiscated, and past grievances will be forgiven. For Saudi Arabia, this is extremely bad news. Losing Taiz would leave government forces along the Bab el-Mandeb Strait exposed to Houthi attacks from elevated terrain—and caught between pincer movements. Losing Taiz could also sever the road link to Aden, Yemen’s provisional capital. Aden—a coastal city of one million people—suffers from severe freshwater shortages and cannot afford desalinated seawater. Its drinking water comes exclusively from wells in northern valleys, delivered via pipelines. Likewise, fuel for Aden’s power plants must be transported by road. This means Aden could face total collapse—starvation, thirst, blackouts, and fuel shortages. Some may ask: Why not rely on maritime transport? The Houthis possess drones and missiles capable of holding their own against the U.S. Navy; blockading Aden’s port would be effortless. Yemen’s government forces are, after all, a fragile coalition of disparate factions—can they possibly win such an uphill battle? Thus, Saudi Arabia urgently launched a 'comprehensive large-scale counteroffensive,' claiming to have mobilized over 100,000 ground troops! One prong aims to recapture the Bab el-Mandeb Strait, thereby breaking Iran’s dual-strait blockade. The other targets Turba and the nearby Habash Mountains to relieve besieged Taiz. The Saudi-led coalition’s air force has gone all-out—conducting more than 150 bombing raids against the Houthis in a single day! Yemen’s government forces claim to have killed 1,860 Houthi fighters and carried out 2,103 'precision strike operations.' Yet the U.S.-based Institute for the Study of War stated it has observed no major victories by government forces. Mocha—the strategic Bab el-Mandeb stronghold—remains firmly under Houthi control. Taiz remains encircled and is being 'gradually digested' by the Houthis. If the Houthis achieve a decisive victory, will Saudi Arabia deploy its ground troops directly? Gulf of Mexico: Hurricane hits—U.S. forced to cut output! Just as Trump imposed a diesel export ban to pressure the G7 into releasing 100 million barrels of strategic reserves—precisely when oil prices were being suppressed—a hurricane named 'Isaias' approached the Gulf of Mexico, forcing oil companies operating there to slash production and evacuate personnel. At noon on October 8, data from the U.S. Bureau of Ocean Energy Management showed that nearly two-thirds of oil production and 57% of natural gas production in the Gulf of Mexico had been shut down. Moreover, 14% of U.S. refining capacity lies directly in the storm’s path! "This couldn’t have come at a worse time, because gasoline and diesel inventories are already extremely low," said the president of consulting firm Lipow Oil Associates—meaning "even brief disruption could have severe consequences." U.S. media suspect that it was precisely this hurricane threat—and critically low inventories—that prompted Trump to declare he would not launch military strikes against Iran before the midterm elections. And if the hurricane intensifies further, the impact could worsen dramatically! Global petroleum reserve buffers are nearly exhausted! On October 9, the CEO of Saudi Aramco—the world’s largest integrated petrochemical company—stated that global commercial oil inventories now stand at less than 6 billion barrels, with the vast majority effectively inaccessible. "The entire system is already stretched to the limit."

Global crude and refined product inventories have run critically low! Goldman Sachs’ model calculates that the 'risk premium embedded in oil prices is approaching its historical peak.'

The global oil market’s shock-absorbing buffer is vanishing. After seven months of wartime consumption, the CEO of the world’s largest independent oil trader declared Western inventories fully depleted. Goldman Sachs, having rebuilt its pricing model, found that the risk premium embedded in September oil prices reached $22 per barrel—the second-highest level ever recorded. Russell Hardy, CEO of Vitol, stated at this week’s London Energy Intelligence Forum: "The West has no more inventory left to draw down," warning that any disruption to shipping through the Strait of Hormuz could send oil prices soaring to $200 per barrel. Meanwhile, Goldman Sachs’ commodities team acknowledged in its latest report that its long-standing Brent crude pricing model has “broken down” this year—because the model previously tracked only OECD commercial inventories, whereas nearly 60% of this round’s inventory drawdown has occurred in non-OECD countries. After rebuilding its model to incorporate global non-OECD inventory data, Goldman Sachs found that the risk premium embedded in September oil prices stood at $22 per barrel—second only to the record high set in April this year, and far exceeding the peak of under $16 per barrel seen during the Russia-Ukraine conflict in 2022. This figure signifies that markets are paying a near-record 'panic premium' for a supply system with virtually no remaining buffer. Industry executives issue unified, urgent warnings: inventory buffers have reached their limit. This week, the most influential oil industry executives gathered in London and issued unprecedentedly stark warnings. Russell Hardy noted that to maintain winter supply-demand balance, roughly 10–14 million barrels of crude oil per day must flow through the Strait of Hormuz. Currently, thanks to U.S. Navy-escorted convoys, about 12 million barrels of crude and 2 million barrels of refined products transit the strait daily—keeping markets barely balanced—but only if no new disruptions occur. Hardy summarized the current crisis in three phases: "We began with a crude oil crisis, then moved into a refined products crisis; now, with some recovery in Middle Eastern crude supply, we’ve entered a shipping crisis." Reportedly, tanker charter rates have surged in an "almost parabolic" fashion—the North Sea cargo rate last week hit $145 per barrel, while European refiners’ profit margins have turned negative. Wael Sawan, CEO of Shell, warned: "These shock absorbers can only withstand so much impact… You cannot sustain this indefinitely without further breakdowns." Amin Nasser, CEO of Saudi Aramco, cautioned: "Emergency reserves might get us through one winter—but they cannot solve long-term supply issues." 6.6 Billion Barrels Gone: The true scale of inventory drawdown Energy analyst John Kemp bluntly stated in his latest report: "Global crude and refined product inventories have fallen to levels where the system possesses almost no resilience against further shocks." According to the U.S. Energy Information Administration’s (EIA) October Short-Term Energy Outlook, global inventories have declined by approximately 660 million barrels since March—nearly 60% of which came from storage tanks in non-OECD countries. This figure aligns closely with Goldman Sachs’ own visible-inventory tracking data: Goldman reported a cumulative drawdown of 509 million barrels since March 1.

Saudi Aramco President: Global Crude Oil Inventories Approaching 'Dangerously Low' Levels

Oct 14, 2026

Saudi Aramco CEO warns global crude inventories are critically low below 6 billion barrels, potentially requiring two years to recover amidst supply constraints and rising demand. The company also plans an 80% increase in natural gas production capacity by 2030.

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