Oil Giant Issues Stark Warning
Saudi Aramco has warned that the global oil market could face “catastrophic consequences” if the conflict between Iran, Israel and the United States continues to disrupt shipping through the Strait of Hormuz.
The narrow waterway, one of the most critical energy routes in the world, has effectively been closed to most commercial shipping since US strikes on Iran began nearly two weeks ago.
The disruption has removed an estimated 20 million barrels of oil per day from the global market, raising concerns about supply shortages and economic fallout.
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Amin Nasser, chief executive of Saudi Aramco, described the situation as the most serious crisis the region’s oil and gas industry has faced.
“While we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced,” he said.
Alternative Routes to Maintain Supplies
Despite the disruption, the Saudi state oil giant said it expects to continue supplying around 70% of its usual crude exports by rerouting shipments.
The company plans to send oil through its east-west pipeline across Saudi Arabia to the Red Sea port of Yanbu.
The pipeline can transport up to 7 million barrels of oil per day. According to Aramco, around 2 million barrels will be directed to domestic refineries in western Saudi Arabia, leaving roughly 5 million barrels available for export.
This would allow Saudi Arabia to maintain most of its global supply commitments, although still significantly below normal export levels.
Aramco has also begun drawing on oil reserves stored outside the Gulf region to help meet demand.
However, Nasser warned that these reserves could not be relied on indefinitely.
“They cannot be used for an extended period of time, but for the time being we are capitalising on it,” he said.
Vital Shipping Route Under Threat
Under normal conditions, roughly 100 oil tankers pass through the Strait of Hormuz each day, transporting crude oil and liquefied natural gas from major Gulf producers to global markets.
The waterway carries about one-fifth of the world’s oil supply.
But shipping traffic has dropped dramatically after Iran’s Islamic Revolutionary Guard Corps threatened to attack vessels using the route.
The group warned that ships travelling through the strait could be “set ablaze” if the conflict continues.
As a result, tanker traffic has dwindled to only a handful of ships per day, intensifying fears of a global energy shortage.
Oil Prices Volatile
Despite the supply concerns, oil prices eased slightly after comments by Donald Trump suggesting the war could end soon.
The price of Brent crude — the international oil benchmark — fell about 14% on Tuesday to around $85 per barrel.
Even with the drop, prices remain significantly higher than the roughly $72 per barrel recorded before the war began.
Earlier this week Brent crude briefly surged to $119 per barrel, its highest level since the period following Russia’s invasion of Ukraine in 2022.
Markets Show Signs of Relief
Financial markets reacted positively to the possibility of a quicker end to the conflict.
Stock indices across Europe and the United States staged a partial recovery after heavy losses earlier in the week.
In London, the FTSE 100 rose 1.6%, while Germany’s DAX climbed 2.4% and France’s CAC 40 gained 1.8%.
US markets also moved higher during afternoon trading on Wall Street.
However, analysts say the outlook for global energy markets remains highly uncertain as long as shipping through the Strait of Hormuz remains restricted.
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Adapted by ASEAN Now · Source · 10.03 2026