Saudi Aramco CEO warns oil market faces “catastrophic consequences”

RIYADH: Saudi Aramco CEO Amin Nasser has issued a stark warning about ongoing disruptions in Middle Eastern oil supplies, accentuating the critical role of the Strait of Hormuz and the potential impact on global markets.

Speaking to reporters, Nasser said the region has already seen 180 million barrels of supply disrupted, with nearly 17 per cent of global oil shipments passing through the Strait. “Shipping resuming in the Strait of Hormuz is absolutely critical,” he said, warning that the longer the disruption continues, the more severe the consequences for the oil market and the global economy.

Aramco is moving to offset some of the shortfall by bringing the East-West pipeline to full capacity over the next few days. However, Nasser cautioned that this would only restore around 7 million barrels per day, far short of the roughly 20 million barrels per day impacted by the de facto closure of the Strait.

The CEO highlighted that global oil inventories are already at a five-year low, which could accelerate drawdowns if tensions persist. “We are doing our best to meet the majority of our customers’ requirements under these circumstances,” he said, noting that spare production capacity is largely concentrated in the Middle East.

While oil prices have eased slightly in recent trading, Nasser said the situation remains fragile. “It is a clear enough warning, and it will only echo louder as the days go by if the situation continues,” he said. Analysts say the remarks underline the potential for dramatic price swings and heightened market volatility if the Strait of Hormuz remains disrupted.