Saudi Aramco warns of severe oil market impacts if Hormuz shipping halts due to the Iran conflict, with global inventories at a five-year low.
Saudi Aramco has warned that global oil markets face catastrophic consequences if shipping through the Strait of Hormuz does not resume amid the ongoing Iran war, as reported by Jeddah's Arab News.
CEO Amin Nasser told reporters that the disruption represents the biggest crisis the region's oil and gas industry has faced. Approximately 20 percent of the world's oil typically passes through the strait, but shipments have been largely blocked. Iran's Revolutionary Guards have vowed to halt exports if US and Israeli attacks continue.
Brent crude prices surged to nearly US$120 per barrel before easing to $92 after US President Donald Trump predicted that the conflict could end soon. He warned that Iran would face harsher retaliation if it blocked exports and mentioned that the US Navy could escort ships, although its capacity remains uncertain.
Mr. Nasser indicated that global inventories are at a five-year low and cautioned about faster drawdowns unless shipping resumes. While Aramco is not exporting from the Gulf, it is meeting most customer demand via the East-West pipeline to Yanbu, which is expected to reach its seven million barrels per day capacity within days.
A small fire at Aramco's Ras Tanura refinery last week was quickly extinguished, and the facility is now restarting operations. The company reported a 12 percent drop in annual profit due to lower crude prices and announced plans for its first-ever share buyback of up to $3 billion.
