Saudi oil giant Aramco is afraid that energy shortages will only get worse as producers are running out of spare capacity to meet rising demand.
"The world is running with less than 2% of spare capacity. Before COVID the aviation industry was consuming 2.5 million bpd more than today. If the aviation industry picks up speed, you are going to have a major problem," CEO Nasser told Reuters.
Nasser viewed the reopening of Shanghai as a potential catalyst to resume oil demand growth.
Oil has been hit by everything but the kitchen sink this year - China's covid lockdowns, a large drawdown across global equity markets, a surging US dollar and higher interest rates.
Despite all the downward pressures, oil prices remain well above US$100 a barrel, perhaps reflecting just how tight the supply side actually is.
The below diagram from HFI Research shows that global oil inventory is sitting at historically low and dire levels.
Oil has been shunned by the broader energy industry, obsessed with ESG credentials and transitioning to renewable energy.
International Energy chief Fatih Birol reiterated this view on Monday, saying that current supply tight conditions should not be used as an excuse for a greater dependency on fossil fuels.
Though, Nasser said global energy consumption is pushing more towards coal and other fossil fuels because "we are not taking seriously the issue of energy security, affordability and availability."
Just last week, the European Commission flagged that the bloc will have to rely on coal for "longer than initially expected" as it attempts to wean itself off Russian energy imports.
Finance Writer & Social Media
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