Saudi Aramco’s CEO Amin Nasser has sounded the alarm on a staggering global oil shortfall, with 1 billion barrels lost over the past two months due to Iran’s blockade of the Strait of Hormuz, a critical chokepoint for energy shipments. Even if shipping routes reopen immediately, Nasser warns the market may not normalize until 2027.
“If trade and shipping remain curtailed by more than a few weeks from today, we anticipate the supply disruption to persist, and the market to normalize only in 2027,” Nasser said.
The disruption, now in its third month amid the U.S.-Israeli conflict and stalled U.S.-Iran negotiations, has pushed oil prices close to $100 a barrel. Nasser emphasized that reopening Hormuz would not instantly rebalance a market already strained by years of underinvestment and depleted inventories.
Aramco has mitigated some impact by redirecting crude through its East-West Pipeline to the Red Sea port of Yanbu, bypassing Hormuz. Pipeline flows averaged 3.6 million barrels a day in March, rising to nearly 4 million in April, though still below pre-war levels. The company’s trading unit has also navigated Hormuz with some shipments on vessels using turned-off transponders to avoid detection.
Despite the crisis, Aramco posted a 26% rise in first-quarter adjusted net income, reaching 126 billion riyals ($33.6 billion), fueled by higher crude prices averaging $76.90 a barrel. The firm maintained its quarterly dividend at $21.9 billion, though free cash flow lagged at $18.6 billion.
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