By Giulia Petroni
The global oil market could lose around 100 million barrels of supply for every week the Strait of Hormuz remains closed if disruptions continue at the current rate, Saudi Aramco Chief Executive Amin Nasser said.
Speaking on an earnings call on Monday, Nasser said the market has already lost about 1 billion barrels of oil supply during the crisis, though some losses have been offset by alternative export routes bypassing Hormuz and releases from strategic petroleum reserves.
"The energy supply shock that began in the first quarter is the largest the world has ever experienced," he said after Aramco reported a 25% rise in quarterly net profit. The comments came as the Iran conflict continues to severely disrupt flows through the strait, where around a fifth of the world's oil and gas used to pass before the war.
If the reopening of the key shipping route is delayed by several more weeks, oil markets might not fully normalize until 2027, according to Saudi Arabia's national oil company.
In a sign the kingdom is seeking to reduce reliance on the waterway, Nasser said Aramco is exploring ways to expand export capacity at its Yanbu terminal on the Red Sea beyond 5 million barrels a day. The terminal allows Saudi crude exports to bypass the Strait of Hormuz via the kingdom's East-West pipeline.
The company is also looking at additional measures to improve resilience over the medium to long term, including the use of artificial intelligence, though Nasser declined to provide details.
Nasser said demand rationing would likely continue as long as supply remains disrupted, though he expects demand growth to rebound strongly once trade flows resume, driven by the need to strengthen energy security after the crisis exposed vulnerabilities in global supply chains.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
05-11-26 1000ET
