Amin H Nasser said it would still take months to recover even if the crucial waterway, which has been brought to a near-standstill by the Iran conflict, were to reopen today, News.Az reports, citing AGBI.
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“The longer the supply disruptions continue, even for another few weeks, it is going to take [a] much longer time for the oil market to rebalance and stabilise,” he told investors on a call to discuss the state energy giant’s first-quarter results.
The crisis could “drag on to 2027” if the deadlock in the strait lasted until the middle of June, he added.
Hopes for deal to end the conflict and effective closure of the strait received another blow on Monday when US President Donald Trump dismissed Tehran’s response to a peace plan as “totally unacceptable”.
Nasser said there used to be “about 70 vessels a day moving [through] the Strait of Hormuz” but that it was now down to a handful.
Strikes on Gulf energy hubs and Iran’s virtual closure of the strait, through which a fifth of global oil and gas shipments normally travel, have hit production and exports.
About 20 million barrels of oil per day passed through the waterway before the conflict began on February 28.
Roughly 20,000 seafarers are estimated to be trapped on ships that cannot pass blockades from the US and Iran.
Nasser became the latest energy boss to warn that the world has lost around a billion barrels of oil over the past two months.
The chief executive of Shell, Wael Sawan, said last week there was a crude shortage of around a billion barrels, either because oil is “locked in” tankers or has not been produced.
Nasser added that the market would lose around 100 million barrels of oil every week that the strait remained closed.
Global stockpiles are falling as countries scramble to keep supply flowing, and the International Energy Agency coordinated the release of 400 million barrels from strategic reserves in March to prop up the market.
The Paris-based IEA estimates the world had 8.2 billion barrels of emergency and commercial oil inventories before the conflict.
Nasser said Aramco alone had “robust” reserves.
Demand is expected to fall this year, with the IEA estimating a decrease of 80,000 barrels per day (bpd), from a previous forecast for growth of 830,000 bpd, in part because of “demand destruction”.
This is a long-term drop in demand rather than a temporary dip, for example caused by widespread switches to electric cars or renewable energy projects that wean countries off fossil fuels as power.
The UK, France, Indonesia and Pakistan are among dozens of countries that have introduced polices to cut energy use and support citizens whose cost of living has risen rapidly, according to a policy tracker compiled by the IEA.
Nasser, however, denied that the crisis was resulting in demand destruction, and was instead “demand rationing” that would pick up quickly once the war is over.
Aramco, the world’s largest oil exporter, reported its largest quarterly rise in net profit on record in the first quarter of the year, helped by higher oil prices due to the Iran war and an increase in crude exports via the Red Sea.
