Nasser warns of supply crunch without renewed oil exploration

President and CEO of Saudi Aramco, Amin Nasser

Saudi Aramco President and CEO Amin Nasser warned of a possible supply crisis if oil companies fail to invest in oil exploration and production to keep pace with rising demand.

In an interview with the Financial Times, Nasser said that the oil sector has seen a decade-long hiatus in exploration activity, which will have significant consequences on the industry.

He ruled out a repeat of the US shale oil boom that flooded global markets for 15 years, stating that between 80% and 90% of the growth came from shale oil.

“Looking ahead to the next 15 years, shale is likely to plateau and then decline. So where will the additional barrels come from to meet demand?” he asked.

He said the future of global supply depends on the actions companies are taking now as new projects typically take five to seven years to come online.

Nasser noted that Aramco closely monitors final investment decisions, which highlights a significant drop in new project approvals. He said that Aramco spends between $1 billion and $2 billion annually on exploration.

He emphasized that exploration is a strategic priority for the company, which enables it to add substantial reserve volumes.