Amin Nasser, the chief executive of Saudi Aramco, said that the oil market is disregarding the reality that spare oil production capacity is now very low during a speech at the Energy Intelligence Forum in London on Tuesday.

He reaffirmed his belief that underinvestment would haunt the markets at today’s London forum. Nasser claims that pressure from investors and policymakers is the reason why upstream underinvestment persists. Instead of long-term projects that will anchor and maintain manufacturing, short-cycle ventures are starting to emerge.

He said: “[The market] is focusing on what will happen to demand if recession happens in different parts of the world, they are not focusing on supply fundamentals.”

Last month, Nasser said that oil inventories are low, “and effective global spare capacity is now about one and a half percent of global demand.”

The CEO of Aramco cautioned the markets in September that if policymakers want to stop the next energy crisis, they must stop focusing on this winter and stop demonising the oil and gas sector. According to the senior executive of Aramco, the existing energy crisis did not begin with the conflict, despite being made worse by Russia’s war with Ukraine.

The real causes of the current state of energy insecurity, according to Nasser, were years of underinvestment, a lack of a backup plan, and alternatives that aren’t prepared to step up and replace conventional energy, he said at the Schlumberger Digital Forum last month.

Excerpts from the chief executive’s speech:

“We need to build up some spare capacity in oil, gas and LNG otherwise any outages or increased demand will seriously stretch producers and could cause more turmoil in markets.”

He reaffirmed the Saudi view that the world needs adequate oil and gas supply before moving away from fossil fuels. “Oil demand will continue to grow until 2030.”

“Alternatives are not ready yet. We need to decarbonize oil and gas and develop CCS but we must do this with adequate oil and gas supply.”