World's biggest oil CEO shares stark oil price warning as pressure builds and supplies run dry

Drivers, travelers, and households continue to feel the crippling effects of the oil shock, even as the immediate disruption around the Strait of Hormuz starts to ease.

Saudi Aramco CEO Amin Nasser is warning that the global oil market has lost much of the buffer that normally helps keep fresh supply problems from quickly spilling into fuel prices and everyday costs, as reported by Seeking Alpha .

Since the Iran war began, nearly 3 billion barrels of oil supply have been lost, while about 1 billion barrels have been drawn from global stocks.

Depleted inventories leave less room to absorb the next disruption. Even if shipping flows improve, governments and energy companies would still need to rebuild those reserves while continuing to meet normal demand.

The bigger issue, then, is not just whether supply returns. It is how quickly the market can rebuild its safety cushion.

Aramco's warning is really about what happens after the oil crisis

Nasser is essentially arguing that even if the immediate geopolitical shock from disruptions in the Strait of Hormuz eases, the oil market wouldn't return to normal as quickly as is commonly perceived.

Speaking at the Energy Intelligence Forum in London , he said the world entered the crisis with almost 10 billion barrels of oil stocks.

Since the Iran war began, nearly 3 billion barrels of gross oil supply have been lost, while more than 1 billion barrels have been pulled from inventories to cushion the disruption.

Aramco now estimates that less than 6 billion barrels of commercial inventories remain, with much of that oil not practically available because some stocks are needed to keep pipelines, terminals, and other infrastructure operating.

The "scarily thin" argument is that 100 million barrels of emergency crude and diesel that the G7 recently agreed to release may soften the immediate squeeze.

Nasser's assessment, however, was much harsher: "Emergency reserves might buy us a winter. They cannot fix long-term supply."

Nasser also said rebuilding depleted inventories while simultaneously satisfying normal consumption could take up to two years. He also argued that without Saudi Arabia's East-West pipeline, which bypasses Hormuz, Brent could have reached $200 a barrel.

It's important, though, for investors to understand that flow recovery isn't stock recovery.

Middle Eastern shipments are already recovering.