Oil Executives Warn Supply Disruptions May Extend to 2027
Global oil executives have issued a stark warning that supply disruptions caused by the Middle East conflict could persist through 2027. The turmoil, driven by shipping bottlenecks, refinery shutdowns, and emergency stockpile releases, has created significant supply-demand imbalances in both crude and refined fuel markets. Speaking at the Energy Intelligence Forum in London, Tengku Muhammad Taufik, CEO of Petronas, described the situation as "very chaotic" for the remainder of this year and potentially into 2027.
Amin Nasser, CEO of Saudi Aramco, estimated that replenishing the 1 billion barrels released from global stockpiles could take up to two years. He noted that oil supply has dropped by approximately 3 billion barrels since the conflict began, with the Strait of Hormuz blockade exacerbating the crisis. Nasser emphasized that restoring market confidence and reopening the strait are critical to easing pressure on crude and refined products.
Sheikh Nawaf Al-Sabah, CEO of Kuwait Petroleum Corporation, highlighted a global shortfall of 6 million barrels per day in refined product supply due to the conflict. He stressed that there is insufficient refining capacity worldwide to replace the shut-down facilities in the Middle East. Kuwait's crude oil production has fallen from 2.6 million to 2 million barrels per day, though exports have remained steady at around 1 million barrels per day.
Ryan Lance, chairman of ConocoPhillips, projected that global oil demand may not recover until 2028 or 2029. He forecasted that the West Texas Intermediate (WTI) price floor could rise to approximately $70 per barrel, with a mid-cycle range of $65-70. Lance also suggested that U.S. crude production could exceed 14 million to 14.5 million barrels per day if oil prices remain elevated.
The ongoing blockade of the Strait of Hormuz remains the key variable in determining the future of oil prices. Even if the strait reopens, rebuilding inventories and stabilizing refining margins will take considerable time, ensuring sustained pressure on consumer fuel prices.