Aramco CEO warns global oil inventory recovery could take two years

Saudi Aramco CEO Amin Nasser warned Monday that rebuilding global oil stockpiles may take up to two years as shipping disruptions in the Strait of Hormuz continue to strain energy supplies.

Speaking at the Energy Intelligence conference in London, Nasser cautioned that the squeeze on global oil supplies could worsen as the U.S.-Iran war drags on. According to International, the CEO stated that nearly 3 billion barrels of supply have been lost since military strikes on Iran began in late February, while only 1 billion barrels have been released from stocks. Nasser described remaining inventories as "scarily thin," noting that much of the 6 billion barrels currently in storage is not practically available.

The conflict has severely disrupted shipping through the Strait of Hormuz, a waterway responsible for approximately 20% of the world's oil and liquefied natural gas. International reported a recent maritime incident where a tanker north of Khasab, Oman, was forced to turn back after being hailed by Iran's Islamic Revolutionary Guard Corps. Nasser indicated that market pressure will persist until this vital strait fully reopens and market confidence is restored.

The CEO's warnings follow a G7 agreement to release 100 million barrels of diesel and crude from emergency reserves. While Nasser expressed a cautious outlook, Feeds reported that some market observers believe his stance may be too downbeat. These observers point to record oil production levels and the potential for alternative delivery routes once the Strait of Hormuz is fully accessible again.

Oil prices showed mixed results on Monday as Middle East exports reportedly began to rise through both the Strait of Hormuz and Saudi Arabia's East-West pipeline. International noted that Brent crude futures rose 0.7% to $102.92 per barrel, while U.S. West Texas Intermediate futures fell 0.4% to $90.76.

Background

The U.S. and Israel launched military strikes on Iran in late February. On the Friday preceding Nasser's comments, G7 governments agreed to an emergency fuel release following pressure from U.S. President Donald Trump.