Aramco Warns of Catastrophic Impact on Global Oil Markets

ISTANBUL

Saudi Aramco has warned that the ongoing closure of the Strait of Hormuz could have catastrophic effects on global oil markets amid a US-Israeli offensive on Iran.

CEO Highlights Global Risks

At a press conference, Aramco CEO Amin Nasser said a prolonged shutdown of the strait “could lead to catastrophic consequences for global oil markets,” according to Saudi broadcaster Al Ekhbariya.

Nasser described the crisis as “by far the largest challenge ever faced by the oil and gas sector in the region.” He noted that the disruption threatens shipping, insurance, and wider industries such as aviation, agriculture, and automotive manufacturing.

Strait Closure and Regional Attacks

On March 2, Ebrahim Jabbari announced the closure of the Strait of Hormuz and warned that ships attempting to pass would be targeted. In addition to closing the strait, Iran has conducted missile and drone attacks on what it calls US interests and bases in Gulf countries, Iraq, and Jordan. Some attacks have hit energy facilities, forcing countries to reduce production and pushing energy prices higher.

Impact on Global Supply and Prices

Nasser warned that global oil inventories are at their lowest level in five years and could fall further if the crisis persists. Oil prices briefly surged to $120 per barrel on Monday before dropping to around $92 on Tuesday after comments by Donald Trump suggesting the conflict could end soon.

The ongoing regional escalation has raised concerns about worsening inflation worldwide and highlighted the global economy’s vulnerability to disruptions in key oil transit routes.
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