Aramco warns of oil market ‘catastrophe’ unless strait of Hormuz reopens soon

Aramco warns of oil market ‘catastrophe’ unless strait of Hormuz reopens soon Saudi Arabian state oil firm calls crisis by far the biggest the region has seen but firm can reroute 70% of exports and tap crude held in storage Business live – latest updates How the Iran conflict could affect energy prices – video explainer Saudi Arabia’s state oil company has warned of “catastrophic consequences” for the world’s oil markets if the US-Israeli war with Iran continues to block shipping in the strait of Hormuz. The world’s biggest oil company expects to be able to export about 70% of its usual crude output despite the stranglehold on the vital trade artery, but its chief executive warned that there would still be “drastic” consequences for the world economy if the disruption continues. Oil shipments from the Middle East have been blocked from passing through the narrow waterway since the US strikes on Iran 11 days ago, erasing about 20m barrels of oil from the global market every day. Amin Nasser, the chief executive of Aramco , said: “While we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced.” Aramco has been unable to ship crude cargoes out of the Gulf due to the disruption, but it hopes to meet customer demands by flowing crude through the east-west pipeline to the Red Sea port of Yanbu where it could be shipped to buyers. The company plans to ramp up shipments through the pipeline to reach its full capacity of 7m barrels a day in the next couple of days, it said. About 2m barrels a day will be sent to Saudi Arabia’s refineries in the west of the country, leaving 5m barrels a day for the global crude market. This represents about 70% of the kingdom’s usual exports. Typically about 100 tankers a day pass through the narrow waterway lying south of Iran, but the number has dwindled to single digits after the Islamic Revolutionary Guard Corps threatened to “set ablaze” any vessel using the trade route, wh...