Oil Executives Warn of Multi-Year Market Disruptions and High Prices
The global oil industry is preparing for prolonged market disruptions, with executives warning that high prices will persist beyond this year. Key factors include shipping bottlenecks, reduced refinery output, and significant inventory draws that will take years to replenish. The closure of the Strait of Hormuz following the US-Israeli war on Iran has severely impacted exports, compounded by attacks on oil and gas infrastructure.
Petronas CEO Tengku Muhammad Taufik predicted "bedlam" for the rest of the year and possibly until 2027. Saudi Aramco's CEO Amin Nasser estimated it could take up to two years to refill global stockpiles depleted as an emergency measure. He noted that 3 billion barrels have been lost since the conflict began, with 1 billion barrels withdrawn from global inventories.
Kuwait Petroleum Corporation CEO Shaikh Nawaf Al-Sabah highlighted a shortfall of 6 million barrels per day of refined products. He emphasized the insufficient global refining capacity to compensate for the shutdowns in the Middle East. Despite disruptions, Kuwait's crude oil exports have remained steady at around 1 million barrels per day.
ConocoPhillips' Executive Chair Ryan Lance projected that global oil demand may not recover until 2028 or 2029. He forecasted a rise in the US benchmark WTI crude price floor to around $70 per barrel, with a mid-cycle price range of $65 to $70. Brent crude futures traded just above $100 per barrel, while WTI was close to $90 per barrel.