The world is facing a major oil supply crunch as most companies are afraid to invest in the sector as they face green energy pressures, the head of Saudi Aramco told Reuters, adding it cannot expand production capacity any faster than promised.
Amin Nasser, head of the world's largest oil producer, said on Monday he was sticking to the target of expanding capacity to 13 million barrels per day from the current 12 million by 2027, despite calls to do it faster.
"The world is running with less than 2% of spare capacity. Before COVID the aviation industry was consuming 2.5 million bpd more than today. If the aviation industry picks up speed, you are going to have a major problem," Nasser told Reuters on the sidelines of the World Economic Forum in Davos.
"What happened in Russia-Ukraine masked what would have happened. We were going through an energy crisis because of a lack of investment. And it started to bite following the pandemic," he added.
Nasser said COVID restrictions in China would not last long and global oil demand would therefore resume its growth.
Saudi Arabia is currently producing 10.5 million bpd, or every tenth barrel in the world, and will likely raise output to 11 million bpd later this year when a broader pact between OPEC and allies such as Russia expires.
Riyadh has faced calls from the West to raise output more quickly and expand capacity faster to help combat the energy crisis.
"If we could do it (expand capacity) before 2027 we would have done it. This is what we tell policymakers. It takes time".