Some see record oil production and more alternative routes for delivery once the Strait of Hormuz fully opens

Saudi Aramco CEO Amin Nasser gave a dire outlook for how long it will take for oil reserves to return to prewar levels.

Washington and Tehran have yet to find an off-ramp for the U.S.-Iran war, but debate over how long it will take for the oil market to recover from lost Middle East crude supply has suddenly become headline news.

On Monday, the chief executive of Saudi Arabia's state-owned petroleum and natural-gas company, Saudi Aramco (SA:2223), said it could take longer than many expect to rebuild the world's inventories of crude oil, even after transit of the commodity returns to normal through the Strait of Hormuz.

At the Energy Intelligence conference in London, Saudi Aramco CEO Amin Nasser warned that global oil supplies will become even tighter as the war continues, saying it could take up to two years to rebuild nearly 3 billion barrels of supply that has been lost since military strikes on Iran began in late February.

Others, however, are a bit skeptical of Nasser's prognosis, arguing that the oil market may be able to recover a bit quicker.

"Although we certainly see some regional crude stockpiles lower than normal, I am not sure it is as alarming as his comments make it seem," said Gary Cunningham, director of market research at energy consulting firm Tradition Energy.

"Yes, moving that much crude around to completely rebalance will take a considerable and concerted effort, but there are questions around if some regions will ever go back to holding as much oil as they have in the past," he told MarketWatch by email.

"There is also the new dynamic around where production is going to come from, with the likely return of Venezuela to the world stage, and we could see a rebalancing of the market much sooner" than Aramco's CEO implied, Cunningham added.

Saudi Aramco did not immediately respond when asked for further comment by email.

The global oil market is set to gain 100 million barrels of oil and refined products over the next four months, thanks to a Group of Seven agreement last week to release some G-7 stockpiles. Still, it won't be enough to replace the billion or more barrels of crude that market has lost since the start of the U.S. and Israel's war with Iran over seven months ago.

More than 1 billion barrels of oil have been drawn, mostly from onshore commercial inventories, to offset the shortfall, said Aramco's Nasser. Yet estimates suggest that less than 6 billion barrels of commercial inventories remain, he said. Most of those barrels are not practically available, leaving the global supply cushion "scarily thin," he noted, according to the Wall Street Journal.

The Middle East conflict has not yet concluded, so it make sense to estimate a 12- to 24-month time frame for rebuilding global inventories, said Matt Gertken, chief geopolitical and U.S. political strategist at BCA Research. This conflict will be a "long, albeit low-level war by Iranian design, deliberately making it difficult for global inventories to be fully replenished within the U.S. 2028 election-cycle time frame," he said.

Iran's likely goal, he said, is to keep refined product prices high "in order to sap the American public's resolve to carry on war against Iran, whether under the Trump administration or future administrations."

The war's disruptions to the flow of oil through the crucial Strait of Hormuz oil chokepoint continue - though, in a Sept. 30 post on X, commodity analytics company Kpler said Middle East Gulf crude exports, excluding Iran, returned to prewar levels of at least 16.5 million barrels per day in September.

"The conflict between the U.S. and Iran is going to change the global oil power structure for years," said Phil Flynn, senior market analyst at the Price Futures Group.

But it might not take quite as long as Aramco's Nasser thinks for the market to recover, Flynn added. The analyst said that when the Strait of Hormuz finally reopens, the market will see record global oil production and more alternative routes put in place for the supply that had been so dependent on the oil chokepoint.

Given that, the market could see a return to a surplus of supplies in 2027, Flynn said.

U.S. and global benchmark prices for oil have seen steep increases so far this year, with U.S. benchmark West Texas Intermediate crude futures (CL00) (CL.1) up nearly 59% and global benchmark Brent crude (BRN00) up 68% year to date as of Friday.

But prices edged lower in Monday dealings, failing to get a boost from Nasser's comments on the oil market's potential years-long recovery time. November WTI crude (CLX26) was down 1.2% at $90.10 a barrel, and December Brent (BRNZ26) was trading at $100.76, down 1.5%.

The idea that it could take years, rather than months, to recover from the war's impact on the global oil market is not a new concept, even as the world has made serious efforts to fill the gap between supply and demand.

Read archived story: It could take years for oil prices to return to $67 a barrel. Here's why.

In recent weeks, a shortage in refined fuels has become headline news in the wake of a rise in diesel prices at the pump to their highest on record - nearly $6.53 a gallon on average on Sept. 22, according to AAA.

-Myra P. Saefong