Aramco expects oil woe until 2027 if no swift Hormuz resumption
- Recovery may take months: Nasser
- CEO says 1 billion barrels lost
- Aramco has ‘robust’ reserves
The global oil market cannot return to normal until next year unless traffic resumes through the Strait of Hormuz chokepoint within weeks, the chief executive and president of Saudi Aramco said.
Amin H Nasser said it would still take months to recover even if the crucial waterway, which has been brought to a near-standstill by the Iran conflict, were to reopen today.
“The longer the supply disruptions continue, even for another few weeks, it is going to take [a] much longer time for the oil market to rebalance and stabilise,” he told investors on a call to discuss the state energy giant’s first-quarter results.
The crisis could “drag on to 2027” if the deadlock in the strait lasted until the middle of June, he added.
Hopes for deal to end the conflict and effective closure of the strait received another blow on Monday when US President Donald Trump dismissed Tehran’s response to a peace plan as “totally unacceptable”.
Nasser said there used to be “about 70 vessels a day moving [through] the Strait of Hormuz” but that it was now down to a handful.
Strikes on Gulf energy hubs and Iran’s virtual closure of the strait, through which a fifth of global oil and gas shipments normally travel, have hit production and exports.
About 20 million barrels of oil per day passed through the waterway before the conflict began on February 28.
Roughly 20,000 seafarers are estimated to be trapped on ships that cannot pass blockades from the US and Iran.
Nasser became the latest energy boss to warn that the world has lost around a billion barrels of oil over the past two months.
The chief executive of Shell, Wael Sawan, said last week there was a crude shortage of around a billion barrels, either because oil is “locked in” tankers or has not been produced.
Nasser added that the market would lose around 100 million barrels of oil every week that the strait remained closed.