Oil Executives Predict Years of Market Turmoil Amid Supply Crunch

Industry executives at a London conference on Monday warned that global oil market turmoil could persist for years, driven by persistent disruptions and supply constraints. The conflict between the US, Israel, and Iran, which escalated in February, has severely impacted oil exports through the Strait of Hormuz, a critical shipping route. Attacks on energy infrastructure have further exacerbated production challenges, leading to significant inventory draws that could take years to replenish.

Petroliam Nasional Bhd (PETRONAS) CEO Tan Sri Tengku Muhammad Taufik predicted prolonged instability, stating that the market could remain volatile through the end of the year and possibly into 2027. Saudi Aramco's CEO Amin Nasser echoed these concerns, noting that replenishing depleted global inventories, amounting to one billion barrels, could take up to two years. He emphasized that the strain on both crude and refined product supplies would persist until the Strait of Hormuz reopens and confidence is restored.

Kuwait Petroleum Corporation CEO Shaikh Nawaf Al-Sabah highlighted a global shortfall of six million barrels per day of refined fuels, attributing the deficit to reduced refining capacity in the Middle East. Despite war-related disruptions, Kuwait has maintained crude oil exports at around one million barrels per day, though production has declined from 2.6 million to two million barrels per day. ConocoPhillips executive chair Ryan Lance projected that global oil demand might not fully recover until 2028 or 2029, with US benchmark West Texas Intermediate (WTI) crude prices potentially stabilizing around US$70 per barrel.

As of Monday, Brent crude futures traded just above US$100 per barrel, while WTI hovered near US$90 per barrel. The outlook remains uncertain, with executives cautioning that the current crisis could have lasting effects on the oil market.