Saudi Aramco, the world's top oil exporter, has issued a stark warning: "catastrophic consequences" await global oil markets if the Strait of Hormuz remains blocked. CEO Amin Nasser stated that the disruption, which is preventing roughly 20% of daily world oil shipments, represents the biggest crisis the region's oil and gas industry has ever faced.
Nasser explained that the crisis extends beyond shipping and insurance, projecting drastic domino effects on aviation, agriculture, automotive, and other industries. Global crude benchmark Brent saw volatility, initially spiking and then trading lower following predictions the conflict might end soon. However, US President Trump warned of a stronger response if Iran blocks exports from the region.
While the US Navy's capacity for escorts is unclear, Aramco's customers assume the risk of delivery. Nasser confirmed Aramco is currently not exporting from the Gulf due to loading issues but is meeting customer needs by tapping into global inventories. The company is also utilizing the East-West pipeline to transport crude to the Red Sea, rerouting significant volumes. Despite a recent small fire at its Ras Tanura refinery, which was quickly contained, Aramco reported a 12% drop in annual profit due to lower crude prices and announced a $3 billion share buyback.