Oil supply may not recover for a year, says Adnoc exec

• Eight months in best-case scenario
• August could be ‘tipping point’
• Benchmarks surged on Monday

Oil supply chains could take up to a year to recover even after flows normalise and the Strait of Hormuz reopens, a senior executive from the Abu Dhabi National Oil Company has said.

“It’s not going to resume like a flip of a switch,” Philippe Khoury, executive vice president for sales and trading at Adnoc, said in a speech at the Middle East Petroleum and Gas Conference in London, according to a Reuters report.

Last month Sultan Al Jaber, the head of Adnoc and the UAE‘s industry minister, said global oil flows would take four months to return to 80 percent of typical levels when the Middle East war ends. They would not return to full capacity until the first or second quarter of 2027, he added.

Speaking at the same London event, Toril Bosoni, head of the International Energy Agency’s oil industry and markets division, estimated that the best-case scenario for the reopening of the strait, the waterway through which a fifth of global oil flows, would be eight months if an agreement were reached today between the US and Iran.

Khoury also warned that oil prices could reach a tipping point in August, when demand is traditionally high, if supply disruptions persist.

Bosoni said demand destruction, where high prices force consumers to cut back on energy and travel needs, was having an impact. “The biggest adjustment factors we have seen to the markets have come from the demand side,” she said.

Oil prices fell more than 1 percent on Tuesday after US President Donald Trump said peace talks with Iran were ongoing.

Brent crude futures were down 1.2 percent to $93.89 a barrel at 11:30 GMT, while US West Texas Intermediate was down 1 percent to $91.18.

Both benchmarks rose by more than 5 percent on Monday, but fell by almost 16 percent last month on hopes of a possible US-Iran peace agreement.

Iran’s Mehr news agency reported on Tuesday that Tehran was reviewing a proposed peace agreement with the US but has not yet responded.

The conflict, which began on February 28, has now entered its fourth month.