Saudi Aramco CEO Amin Nasser has issued a stark warning regarding the global oil market's recovery timeline, citing ongoing disruptions in the Strait of Hormuz due to the Iran war as a major factor. On an earnings call, Nasser stated that the energy sector has lost approximately 1 billion barrels of oil supply during the crisis, with the world currently losing about 100 million barrels of oil supply per week as long as the Strait remains largely closed to tanker traffic [1]. He emphasized that, even with efforts to reroute shipments and the release of strategic petroleum reserves, the market faces the largest energy supply shock ever experienced [1].
Nasser further explained that if the disruption continues for several more weeks, oil markets may not normalize until 2027 [1]. He attributed the severity of the situation not only to the current conflict but also to years of underinvestment in the sector, which have compounded the strain on global oil inventories [1].
To mitigate the impact, Saudi Aramco has maximized the use of its East-West pipeline, which has reached its full capacity of 7 million barrels of oil per day. Of this, 2 million barrels per day are directed to refineries on Saudi Arabia's western coast, while 5 million barrels per day are available for export via the Red Sea port of Yanbu [1]. Nasser noted that Aramco is considering expanding export capacity at Yanbu to further alleviate shipping constraints [1].
Saudi Arabia responded to the crisis by cutting oil output by 2 million barrels per day after Iran threatened shipping traffic in the Strait of Hormuz, a critical passage that previously handled about 20% of the world's oil supply [1]. Nasser underscored the vital role of oil and gas in energy security and the global economy, highlighting the need for reliable energy supply in light of recent events [1].
CONCLUSION
Saudi Aramco's leadership has highlighted the unprecedented scale of the current oil supply shock and warned that market normalization could be delayed until 2027 if disruptions persist. The company's efforts to reroute supply and expand export capacity underscore the severity of the situation, with significant implications for global energy security and market stability.