Saudi Aramco CEO Warns of Prolonged Oil Supply Squeeze and Slow Stockpile Rebuild

Dubai: The global squeeze on crude oil and refined fuel supplies is set to worsen, while rebuilding stockpiles depleted during the Strait of Hormuz crisis could take up to two years, Saudi Aramco Chief Executive Amin Nasser said on Monday.

Speaking to Reuters at the Energy Intelligence conference in London, Nasser said oil markets would remain under pressure until the strategic waterway fully reopens and market confidence returns.

“Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify. Even then, replenishing inventories while meeting demand could take up to two years,” Nasser said.

His warning points to a potentially prolonged impact from the disruption, even if oil flows through the Strait of Hormuz begin to normalise.

Almost 3 billion barrels of oil supply have been lost since the start of the conflict, Nasser said, while about 1 billion barrels have been released from stocks to help offset the shortfall.

Nasser said the remaining roughly 6 billion barrels of oil in storage should not be considered practically available to the market.

While an earlier report by Kpler suggested that oil exports have come back to pre-war levels, this as Nasser says, comes from commercial inventories held by refiners, traders and other market participants, rather than reserves that can be relied upon indefinitely.

Producers and refiners would have to rebuild inventories while continuing to meet global oil demand. That could keep supply conditions tight well after the immediate shipping disruption has eased.

A reopening of Hormuz could remove a major logistical bottleneck, but the barrels already taken from commercial and emergency inventories would still need to be replaced. That would require additional supply while demand continues