According to WPB, nearly one billion barrels of crude oil have been drawn from global inventories since disruptions to shipping through the Strait of Hormuz, while the share of transportation and logistics in the cost of a barrel has increased from less than 5% to more than 30%. The figures were presented by Sultan Ahmed Al Jaber, Group CEO of Abu Dhabi National Oil Company (ADNOC), during the opening of ADIPEC 2026 in Abu Dhabi on November 2, highlighting the growing pressure on global energy supply chains and the costs of delivering petroleum to international markets.
The ADNOC chief warned that the disruption to oil trade had significantly reduced the inventories available to cushion the market against further supply interruptions. According to his assessment, the withdrawal of nearly one billion barrels from global oil inventories since the disruption of the Strait of Hormuz has weakened the industry's ability to absorb additional shocks. The figure represents an estimate presented by ADNOC's leadership rather than an independently established measurement of all categories of global oil stocks.
The pressure extends beyond crude oil. Al Jaber reported that diesel inventories in some markets had fallen to their lowest seasonal levels in 35 years. He also highlighted a supply gap of approximately 600 billion cubic feet of liquefied natural gas (LNG) in other markets. These figures point to difficulties affecting several parts of the energy supply chain, although the reported diesel and LNG shortages do not apply uniformly to all regions.
One of the most significant points in the address concerned the changing economics of transportation. According to Al Jaber, logistics accounted for less than 5% of the cost of a barrel before the disruption, compared with more than 30% under current conditions. The increase suggests that the costs associated with moving energy products have become a considerably larger component of delivered supply costs. However, the percentages were presented as part of his industry assessment and should not be interpreted as a uniform cost breakdown for every crude oil shipment.
The sharp increase in the reported logistics share reflects the importance of transportation routes in a market exposed to geopolitical disruption. Restrictions affecting strategic waterways can require suppliers and buyers to consider alternative routes, different shipping arrangements, and additional logistical measures. Longer journeys and more complex delivery arrangements may increase costs, even when crude oil remains physically available at its point of production.
The Strait of Hormuz is particularly important because of its role in connecting Middle Eastern petroleum exporters with international markets. Disruptions affecting the waterway can influence the availability and timing of crude oil and refined product shipments, with consequences for refiners, traders, shipping companies, and end users. The impact can extend beyond countries importing oil directly from the Persian Gulf, as changes in regional supply flows influence the wider petroleum trading system.
The market pressure has also been reflected in international oil and fuel prices. At the time of the November 2 report, Brent crude was trading around $110 per barrel, approximately 50% above its level in February before the conflict began. Diesel prices in several markets had also reached record highs, increasing concerns about transportation costs, inflation, and the financial burden on industrial consumers.
In response to the supply disruption, the International Energy Agency agreed in October to release more than 20 million barrels of diesel into the market, alongside any oil remaining from an emergency reserve release announced earlier in the year. The measure was intended to improve fuel availability and ease pressure on prices. However, emergency stock releases provide a temporary supply response and do not eliminate the need to restore reliable commercial flows.
During the ADIPEC address, the ADNOC CEO called for an expansion of strategic petroleum storage, larger refined product inventories, and more flexible refining capacity closer to consuming markets. He also emphasized the importance of reliable transportation infrastructure, operational information, investment, and insurance arrangements in maintaining energy trade during periods of disruption.
These developments are particularly relevant to refining companies that depend on regular crude oil deliveries. Higher transportation costs and uncertainty over shipment schedules can complicate feedstock procurement and refinery operating plans. Even where alternative crude supplies are available, differences in shipping distances, crude characteristics, and processing requirements may affect refinery economics and production decisions.
For the global bitumen industry, the potential implications are significant but require careful distinction from the reported crude oil figures. Bitumen is primarily produced from heavy refinery residues, and its output depends on the composition of the crude processed, refinery configuration, and operating decisions. Higher crude transportation costs can increase feedstock procurement expenses, but they do not automatically establish that bitumen production has declined.
Transportation costs can also influence the delivered price of exported bitumen. Exporters may continue to offer products at competitive FOB prices while importers face higher overall procurement costs because of ocean freight, insurance, port handling, or inland delivery expenses. The difference is especially important for markets that depend on imported bulk or packaged bitumen for road construction.
However, the reported increase in logistics costs from less than 5% to more than 30% concerns the wider petroleum supply chain and cannot be applied directly as a fixed cost ratio to bitumen shipments. Bitumen transportation economics differ according to cargo size, packaging, vessel type, heating requirements, shipping route, and delivery conditions.
The latest ADNOC statements also do not establish a specific reduction in global bitumen production, exports, or inventories. Evaluating the actual impact on bitumen markets would require separate data covering refinery production, heavy feedstock availability, export volumes, regional inventories, and freight rates for bitumen cargoes.
The developments highlighted at ADIPEC 2026 demonstrate that the availability of petroleum resources is only one part of energy security. The ability to transport crude oil and refined products reliably and at commercially sustainable costs has become increasingly important. For bitumen producers, exporters, and buyers, the combination of tighter petroleum inventories and higher logistics expenses reinforces the need to monitor refinery supply conditions and delivered costs separately when assessing international market developments.
By WPB
Global Oil Inventories, ADNOC, ADIPEC 2026, Oil Shipping Costs, Petroleum Logistics, Strait of Hormuz, Global Oil Supply, Diesel Inventories, Crude Oil Market, Middle East Oil Exports, Refinery Feedstock Costs, Bitumen Market, Bitumen Freight, Bitumen Export Prices, Petroleum Supply Chain, Energy Security, Brent Crude Oil, Oil Transportation
