Aramco warns of severe market impact if Hormuz disruption continues
Saudi oil major says it can meet most export needs but global supply risks remain significant.
Saudi Aramco has cautioned that global oil markets could face “catastrophic consequences” if the ongoing blockage of the Strait of Hormuz is not resolved soon, as tensions from the U.S.-Israeli war with Iran continue to disrupt one of the world’s most critical shipping routes.
Although the company expects to supply roughly 70% of its usual crude volumes by rerouting barrels through Saudi Arabia’s east‑west pipeline system, CEO Amin Nasser warned that the prolonged closure of Hormuz would still have “drastic” repercussions for the global economy, as reported by The Guardian. Middle Eastern crude shipments have been unable to pass through the strait for 11 days, temporarily removing an estimated 20 million barrels per day from international markets.
Aramco has been unable to export crude directly from the Gulf since the disruption began, prompting the company to redirect supply through its pipeline to the Red Sea port of Yanbu. The company plans to ramp up flows through this route to its maximum capacity of 7 million barrels per day in the coming days. Approximately 2 million barrels per day will be allocated to domestic refineries in western Saudi Arabia, while 5 million barrels per day will be available for international buyers.
Despite the warning, oil prices eased on Tuesday after U.S. political statements suggested the conflict could de‑escalate “very soon.” Still, Aramco described the current disruption as the most serious challenge the region’s energy industry has faced, surpassing previous episodes of geopolitical tension.
