Aramco CEO Warns of 2027 Oil Market Recovery Delay Due to Hormuz Disruptions
Saudi Aramco CEO Amin Nasser warned that disruptions in the Strait of Hormuz could delay the oil market's recovery until 2027. During a call discussing the company's first-quarter results, Nasser emphasized that prolonged supply disruptions would significantly extend the time needed for market stabilization. He noted that if the current situation persists until mid-June, the recovery could stretch into 2027. The conflict in Iran, which has effectively closed the strait, is already considered the largest disruption in energy market history.
The market is losing approximately 100 million barrels of oil per week due to the strait's closure, with only two to five vessels crossing daily compared to the usual 70. Nasser stated that even if the strait reopens immediately, it would take months for the market to rebalance. The disruption has severely impacted tanker traffic, leading to surging energy prices and fears of inflation and economic downturn.
Aramco has increased exports via the East-West pipeline to the Red Sea port of Yanbu to maintain 60-70% of its crude export volumes. Nasser described the pipeline as a 'critical lifeline' and mentioned plans to expand Yanbu's export capacity, which currently handles around 5 million barrels per day. The company is also maximizing exports of refined products to capture higher margins while the strait remains blocked.
Regarding refinery operations, Nasser confirmed that the SAMREF refinery is fully operational, while the SATORP joint venture with TotalEnergies is partially on stream and undergoing restoration. The Ras Tanura refinery has been restored, with some units currently undergoing maintenance. Nasser predicted a strong return to demand growth once normal shipping and trade resume, describing the current market as 'demand rationing' rather than 'demand destruction'. He added that Aramco can reach its maximum sustainable capacity of 12 million barrels per day of crude in less than three weeks if needed.