ConocoPhillips Co.’s CEO on July 19 warned of looming crude oil shortages and price volatility, citing limited spare capacity among OPEC and slow U.S. output gains ahead.

Ryan Lance, head of the largest U.S. independent oil producer, offered a dour outlook on future supply in remarks to members of the Houston Producers Forum. His comments came days after U.S. President Joe Biden returned from Saudi Arabia without success in securing an agreement for the OPEC+ group to boost production.

“Ultimately, demand will go back to pre-pandemic levels,” Lance said while cautioning about OPEC's lack of additional capacity and a U.S. production plateau. “There is a supply crunch coming.”

The United Arab Emirates and Saudi Arabia could add 1 million or 2 million bbl/d over time, but “the rest of the OPEC+ [alliance] is struggling,” including Nigeria, Angola and Libya, he said.

U.S. oil production, which soared by 4 million bbl/d in the three years ended December 2019, is expanding more slowly. “The U.S. will grow shy of a million barrels a day this year ... and we’ll probably grow close to another million barrels next year. But we start to kind of plateau,” he added.

Oil demand ultimately will exceed pre-pandemic levels and peak demand is probably another 10 to 20 years out, he said. Concerns about recession will lead to further market volatility, Lance added.

“If you are going to be in the business, be prepared for a lot of volatility,” he told the energy audience. “It’s going to go up and it’s going to go down, but not necessarily in that order.”