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Saudi Aramco chief warns Strait of Hormuz disruption worsens oil shock
He said restoring inventories would take up to 18 months at about 2.1 million barrels per day, and Asia has already cut crude imports by around 6 million barrels per day at the crisis peak.
Saudi Aramco CEO Amin H. Nasser said the Middle East geopolitical crisis is continuing to aggravate what he called the biggest supply shock in history, during remarks in the European trading session. He warned that a Strait of Hormuz disruption impacts not only crude supply but also downstream refining and global trade flows.
Nasser said replenishing depleted inventories if the Strait were open “today” would take up to 18 months at an average rate of 2.1 million barrels a day. He added that the world has lost more than 2.6 billion barrels of oil destined for critical industries due to the crisis, while Aramco’s east-west pipeline and global inventories have helped lower the net loss to around 1.8 billion barrels.
The CEO also pointed to a disconnect between futures and physical markets, citing strong refining margins that reflect refined product tightness. He said the global refining system is stretched, and that any major unplanned or prolonged refinery shutdown could increase pressure on the overall energy supply.
Nasser noted Asia has already been affected, with crude oil imports reduced by around 6 million barrels a day at the peak. He said trade flows through the strait are at about one-tenth of pre-conflict levels, and that the world could lose more than 100 million barrels for each week the strait is closed, with limited upside until shipping normalizes.
He also said a slight positive move was seen in WTI after his comments. At press time, WTI was up about 1.0% to around $79.50.
Latest closeWTI crude $80.00 ▼5.5%