Aramco CEO: Middle East Crisis Worsens Biggest Supply Shock in History
Saudi Aramco CEO Amin H. Nasser warned that the ongoing Middle East crisis is exacerbating the biggest supply shock in history. The world's largest oil producer emphasized that if the Strait of Hormuz, a critical chokepoint for nearly 20% of global energy supply, were open today, it would take 18 months at an average rate of 2.1 million barrels a day to replenish depleted inventories.
Nasser stated that the crisis has resulted in the removal of an average of 11 million barrels of liquids per day and over 2.6 billion barrels of oil destined for various industries. Aramco's east-west pipeline and global inventories have helped mitigate the supply shock, reducing net losses to around 1.8 billion barrels.
The CEO expressed concern about the disconnect between futures and physical markets, citing strong refining margins as evidence of tightness in refined product markets. He also warned that if refineries were to suffer a major unplanned or prolonged shutdown, the global energy supply system could face increased pressure.