The world entered the 2026 Iran war with roughly 10 billion barrels of total global oil stocks. Since then, Saudi Aramco’s chief executive told a London conference on Monday, nearly 3 billion barrels of gross supply have been lost — and rebuilding what has been consumed will take up to two years after the Strait of Hormuz fully reopens, an extended timeline that keeps elevated oil and diesel prices firmly on the horizon for American consumers and technology companies through late 2028.

Amin Nasser, president and CEO of the world’s largest oil company, delivered the warning in his first in-person public address since the US-Israel war with Iran began on February 28. Speaking at the Energy Intelligence Forum in London — the industry’s annual flagship gathering — Nasser made clear that the G7’s October 2 decision to tap 100 million barrels of emergency reserves through the International Energy Agency is a necessary but structurally insufficient measure. “Until Hormuz fully re-opens and confidence returns, the crude reality is that pressure at both ends of the barrel will intensify,” he said. “Even then, replenishing inventories while meeting demand could take up to two years.”

“The system is already straining,” Nasser told the audience. “And with precious little else the world can turn to, the supply resilience cushion is scarily thin.”

From Worst Energy Shock in History to a Two-Year Recovery Clock

The scale of the disruption has eclipsed every prior energy crisis in recorded history. The International Energy Agency has characterized the closure of the Strait of Hormuz as surpassing the combined impact of the 1973 oil embargo, the 1979 Iranian revolution, and the 2022 Russia-Ukraine energy conflict, with IEA chief Fatih Birol calling it the worst crisis ever. Roughly 20 million barrels of crude oil and petroleum products per day previously moved through the strait — approximately one-fifth of global petroleum liquids consumption — before the war brought that flow to a near-standstill.

Nasser had already used prior earnings calls to escalate the warning: in May 2026 he characterized it as an unprecedented oil supply shock, and in August he told investors that rebuilding inventories could take 18 months after Hormuz reopened. Monday’s address at the Energy Intelligence Forum pushed that estimate to “up to two years” — meaning consumers, freight operators, and technology companies should not expect a return to pre-war energy economics before late 2028 at the earliest.

More than one billion barrels have been drawn from reserves worldwide, Nasser told the London audience, as Bloomberg reported from the forum, reducing the practical emergency buffer that countries can access. Of the roughly 6 billion barrels that remain in global storage, he noted that the “vast majority” is not practically accessible — held in locations or forms that cannot be quickly released into the market.

The International Monetary Fund, in its latest assessment, projected global economic growth could slow to as little as 2 percent next year with inflation rising above 6 percent if energy market disruptions persist and oil prices remain elevated, per the IMF’s worst-case scenario for a prolonged conflict. Nasser referenced those projections directly, warning: “The longer the disruption continues, the risk of this happening only grows.”

G7’s Emergency Reserves: Necessary but Not Nearly Enough

Three days before Nasser’s London remarks, G7 leaders agreed to release 100 million barrels of diesel and crude oil from emergency strategic reserves through the IEA, to be disbursed over four months with a front-loaded diesel release within the first 20 days. The announcement came under pressure from US President Donald Trump, who had threatened to restrict American diesel exports to Europe if allied governments refused to act. US diesel prices had peaked at a record $6.53 per gallon on the week ending September 21, 2026 — the highest level in the EIA’s records going back to 1994 — before easing slightly to $6.38 per gallon by September 28.

Oil markets responded with modest relief: Brent crude eased after the G7 announcement, as ADVFN’s October 5 market coverage noted, before partially recovering. But that relief was quickly put in context by Nasser and other industry executives at the same London conference. Strategic reserve releases, they noted, address near-term tightness — not the structural supply deficit that underpins it.

The IEA had already deployed a record emergency oil release in March 2026 — 400 million barrels, its largest ever. That intervention provided temporary price relief but left member countries with materially thinner buffers entering the fourth quarter of 2026 — precisely the condition Nasser described Monday as “scarily thin.”

The G7’s coordinated 100-million-barrel release illuminates why the arithmetic alone cannot close the gap. The practical drawdown rate from US and European strategic reserves is approximately 2 million barrels per day at maximum, as Nasser has noted in prior earnings calls. At that rate, the G7’s 100 million barrel release buys roughly 50 days of supplemental supply — meaningful for near-term price management, but nowhere near sufficient to address the estimated 1 billion barrel inventory hole that has already opened.

Petronas CEO Tengku Muhammad Taufik, speaking at the same London forum, offered a similarly bleak outlook: “I think it is going to be bedlam for the bulk of the end of the year and maybe 2027,” he said.

Does the East-West Pipeline Have Any Room Left to Grow?

For readers wondering what “alternative routes” actually means in physical terms, the answer centers on a single piece of infrastructure: Saudi Arabia’s East-West Pipeline, a 1,200-kilometre (746-mile) artery built during the Iran-Iraq war of the 1980s that connects Saudi Arabia’s eastern oilfields to the Red Sea port of Yanbu, bypassing the Strait of Hormuz entirely.

Aramco rerouted the bulk of its exports through this pipeline as soon as the Hormuz crisis began, and by the first quarter of 2026 the line had hit its 7 million bpd ceiling, the highest it can sustain. Of that volume, roughly 2 million barrels per day supply Saudi Arabia’s own west coast refineries, leaving approximately 5 million barrels per day available for export from Yanbu.

That 7 million bpd ceiling is the binding constraint. Saudi Arabia’s maximum sustainable production capacity is 12 million barrels per day, which Nasser confirmed remains intact and accessible within days. But producing that oil only matters if it can be exported — and the gap between 12 million bpd production capacity and the current 7 million bpd pipeline ceiling cannot be easily closed.

In July 2026, Reuters and Arab News reported that Saudi Arabia was in preliminary talks with neighboring producers — including Kuwait, which currently has no pipeline bypass route for its own crude exports — about expanding East-West Pipeline capacity by up to 2 million additional barrels per day. Sources familiar with those discussions confirmed that such an expansion would take years to complete and cost billions of dollars, regardless of whether it involves upgrading existing infrastructure or constructing new pipe. Nasser confirmed Monday that Aramco was actively developing what he called “fourth and fifth” export routes, including studying additional overseas storage arrangements.

The United Arab Emirates has its own bypass pipeline with a capacity of 1.8 million barrels per day to the port of Fujairah, and has completed half of a new expansion that will double that capacity when it becomes operational in 2027. But the UAE quit OPEC+ ahead of the group’s May 2026 meeting, a sign of the institutional strains that have accompanied the crisis.

Houthi attacks on Red Sea and Bab el-Mandeb shipping have added a second layer of risk to the Yanbu export route itself — complicating the fallback that Nasser describes as already operating at maximum throughput.

What This Means for Americans at the Pump and in the Supply Chain

The phrase “both ends of the barrel” that Nasser used on Monday carries specific technical meaning: crude oil prices at the production end, and refined fuel prices at the consumption end. The distinction matters because crude and refined products do not move in lockstep. Diesel, jet fuel, and petrochemical feedstocks require refinery processing — and much of that refining capacity across the Middle East has been hampered by infrastructure damage and reduced throughput during the conflict.

That asymmetry explains why US diesel prices surged to record highs in September 2026 even as crude benchmarks remained below all-time peaks. American Action Forum analysis found that the approximately $1.61-per-gallon increase in diesel prices from the start of the conflict through August 2026 added roughly $34.8 billion in direct fuel costs to the US commercial freight and agriculture sectors — costs that cascade through supply chains into higher goods prices for consumers. By September 28, diesel averaged $6.38 nationally, up from $3.75 a year earlier.

GasBuddy’s head of petroleum analysis, Patrick De Haan, warned in September that record diesel prices would “reignite inflation up and down the supply chain,” with the spike already costing Americans more than $46 billion since the war began. That pressure point intensifies with Nasser’s two-year replenishment timeline, because it means the window for sustained diesel tightness extends far beyond what central banks had modeled when charting disinflation paths for 2026 and 2027.

About a third of global fertilizer trade passes through the Strait of Hormuz, and disruptions to that trade have already pushed agricultural input costs higher — adding a food-price dimension to the inflationary pressures from fuel alone.

What This Means for Tech: Data Centers Face Sustained Energy Cost Pressure

For TechTimes readers, the two-year inventory replenishment horizon has a specific downstream implication that broader coverage of this crisis has largely missed: hyperscale AI data centers — the physical infrastructure behind every major cloud platform, large language model, and enterprise AI workload — run on diesel backup generators as their last line of defense against grid outages.

Under NFPA 110 standards, Tier III and Tier IV data centers typically specify 96 hours of onsite diesel runtime at full load, backed by resupply contracts that guarantee tanker delivery within 24 hours. For a 100-megawatt hyperscale campus, the generator fleet alone represents a capital outlay of $99–$132 million — before fuel systems, land, and permitting.

Those contracts and capital allocations were structured under pre-war energy pricing assumptions. Operators who locked in five-year fixed-price diesel supply agreements before February 2026 are faring materially better than those running on spot-indexed contracts — with industry analysis reporting 8–12 percent savings for fixed-price holders against current spot rates. With national average diesel at $6.38 per gallon and Nasser now extending the elevated-price horizon by a further year, cloud providers face sustained operating cost pressure that analysts have begun factoring into projections for cloud pricing tiers.

Energy and semiconductor supply chains share a further exposure: chip fabrication plants and logistics networks are among the most energy-intensive industrial operations in the modern economy, and extended diesel tightness at record prices directly raises operational costs for the facilities that manufacture and distribute the hardware underpinning the AI buildout.

Meta, Google, Microsoft, and Amazon have all committed to natural gas-powered dedicated generation for their AI data center expansions — a decision that, while insulating them from diesel spot exposure, ties their long-term cost basis to gas markets that are themselves affected by the regional energy disruption stemming from the Hormuz closure.

Aramco’s Own Balance Sheet Thrived While the World Struggled

The severity of the supply shock has come with a paradox: for Aramco itself, higher prices more than offset the operational disruptions. The company posted a 44% Q2 2026 profit surge to $32.69 billion for the second quarter of 2026, powered by higher crude, refined product, and chemicals prices. It declared a base dividend of $21.9 billion for the quarter.

Nasser was nonetheless careful at the London forum to frame Aramco’s operational resilience not as a performance story but as a resource security one. Saudi Arabia’s 12-million-barrel-per-day maximum sustainable production capacity is intact and could be made available within days of a Hormuz reopening, he said. The constraint is not production — it is export infrastructure and downstream inventory depletion.

His message to governments was direct: strategic reserve releases manage symptoms, not causes. The structural lesson of the Hormuz disruption is that the world is now operating with a critically depleted emergency buffer — one that will require years of disciplined restocking concurrent with ongoing demand, not months.

Can Kuwait and Qatar Close the Pipeline Gap?

One question the London forum left partly unanswered was whether Gulf producers who lack their own Hormuz bypass routes can be integrated into Saudi Arabia’s alternative export system. Kuwait’s crude exports have been maintained at roughly 1 million barrels per day despite production falling from approximately 2.6 million to 2 million barrels per day — meaning the country has been drawing on stored volumes to meet contract obligations. That situation is unsustainable as storage depletes.

Kuwait Petroleum Corporation CEO Sheikh Nawaf al Sabah confirmed in July 2026 that Kuwait was in discussions with Saudi Arabia about integrating into expanded pipeline infrastructure. But those talks remain preliminary, and the expansion itself would take years — not months — to execute even if financed and approved immediately.

Qatar, which supplies roughly 20 percent of the world’s liquefied natural gas through Hormuz-adjacent routes, faces its own constraints: LNG requires specialized export infrastructure with no economically feasible overland pipeline alternative for most of its volumes.

How Should U.S. Consumers and Businesses Plan?

For the consumer, the two-year replenishment timeline translates to a sustained expectation of above-historical-average diesel and gasoline prices through at least 2027 and likely into 2028. The EIA, in its September 2026 forecast finalized before the Energy Intelligence Forum speech, projected national retail diesel averaging $4.40 per gallon in 2027 — down sharply from the 2026 average of roughly $5.07 — but Nasser’s extended timeline suggests even that forecast may prove optimistic if inventory rebuilding takes longer than the fastest-case scenario.

For businesses dependent on freight, agriculture, aviation, or manufacturing with petroleum-derived inputs, the planning horizon needs to extend through 2028, not 2026–2027.

For technology companies, the implications are twofold: direct operating costs for energy-intensive infrastructure (data centers, fabrication plants) will remain elevated; and the inflationary environment that sustained high energy prices perpetuate will complicate central bank exit paths from restrictive policy, affecting the financing environment for capital-intensive AI infrastructure buildout.

Nasser’s message from London was the starkest public assessment yet from inside the industry: emergency reserve taps cannot fix a two-year structural supply gap, and the world is running out of the cushion it had counted on to buy time.

Frequently Asked Questions

Why does it take two years to replenish oil stockpiles even after Hormuz reopens?

Restoring global oil inventories is not simply a matter of reopening a shipping lane. Nearly 1 billion barrels have already been drawn from strategic and commercial stockpiles, and the maximum practical drawdown and refill rate from US and European reserves is approximately 2 million barrels per day. Meanwhile, demand continues at its normal pace — meaning restocking competes with ongoing consumption. At those rates, refilling a 1-billion-barrel gap while meeting global demand of roughly 100 million barrels per day takes well over a year under the best-case scenario. The two-year inventory rebuild timeline also accounts for the time needed to rebuild confidence in supply availability, normalize shipping insurance and tanker logistics, and restart Gulf refinery operations that have been partially curtailed during the conflict.

How does the oil supply crisis affect everyday diesel and gasoline prices in the United States?

US diesel prices hit a record $6.53 per gallon in the week ending September 21, 2026 — the highest in EIA’s September 2026 diesel price records going back to 1994, and up from roughly $3.75 per gallon a year earlier. Diesel is the fuel of commercial trucking, rail, farming, and construction, meaning its cost cascades into prices for groceries, manufactured goods, and building materials. Gasoline is also elevated at roughly $4.47 per gallon nationally, though it has not set a new record the way diesel has. The two-year replenishment timeline announced Monday suggests the US consumer should not expect a return to pre-war fuel economics before late 2028 at the earliest. The EIA’s own September 2026 forecast projected diesel averaging $4.40 per gallon in 2027 — still significantly above the pre-war average — and that forecast was made before the Energy Intelligence Forum speech extended the normalization timeline.

Why can’t the world just pump more oil to cover the gap?

The problem is not production capacity — it is export infrastructure. Saudi Arabia’s maximum sustainable production capacity of 12 million barrels per day remains fully intact. But producing oil only helps if it can reach buyers, and the Strait of Hormuz, which previously handled roughly 20 million barrels per day of combined crude and refined products, remains largely closed. The East-West Pipeline at maximum capacity provides a partial workaround, but it is already running at its ceiling of 7 million barrels per day. Other Gulf producers — including Kuwait and Qatar — have limited or no alternative export infrastructure. The proposed East-West Pipeline expansion of up to 2 million additional barrels per day is in early preliminary discussions and would take years to build at a cost of billions of dollars, offering no near-term relief.

What does the oil shortage mean for cloud computing and AI services?

AI data centers rely on diesel-powered backup generators as a critical infrastructure safeguard, typically sized to provide 48–96 hours of onsite fuel at full load. With national average diesel at $6.38 per gallon and a two-year supply normalization horizon, hyperscale cloud operators face sustained elevated operating costs that their pre-war energy contracts did not anticipate. Industry analysis finds that operators on fixed-price diesel supply agreements are saving 8–12 percent compared to spot-indexed contracts at current prices. Beyond backup power, the broader inflationary pressure that sustained high energy prices create — through freight, manufacturing, and supply chain costs — affects the economics of AI infrastructure buildout and may eventually filter into cloud service pricing.