The chief executive of Saudi Aramco said Monday it could take up to two years to rebuild global oil inventories, warning that the squeeze on supplies could yet get worse as the U.S.-Iran war drags on.
Speaking at the Energy Intelligence conference in London, Saudi Aramco CEO Amin Nasser said pressure at both ends of the barrel will intensify until the strategically vital Strait of Hormuz fully reopens and confidence returns to energy markets.
The war has severely disrupted shipping through the strait, a narrow waterway that typically handles around 20% of the world's oil and liquefied natural gas supplies, sending shock waves through the global economy.
"Even then, replenishing inventories while meeting demand could take up to two years," Nasser said, according to Reuters.
His comments come shortly after G7 governments agreed on Friday to release 100 million barrels of diesel and crude from emergency reserves, following pressure from U.S. President Donald Trump.
The G7 members are France, Canada, Germany, Italy, Japan, the United Kingdom and the U.S. France currently holds the group's presidency. The European Union also participates in its meetings.
Aramco's Nasser said nearly 3 billion barrels of oil supply had been lost since the U.S. and Israel launched military strikes on Iran in late February, while 1 billion barrels of oil had been released from stocks.
Most of the stock draw to date had come from commercial inventories, with the CEO of the world's largest oil company saying the remaining 6 billion or so in storage is "not practically available."
He added: "The system is already straining."