Oil giant warns of catastrophe over disrupted shipping

The world’s biggest oil exporter has warned of “catastrophic consequences” for world oil markets if the Iran war continues to disrupt shipping in the Strait of Hormuz.

The outage promises to not only disrupt the shipping and insurance industries but also have serious domino effects on aviation, agriculture, automotive and other industries, Amin Nasser, CEO of Saudi Arabia’s Aramco, told reporters on the earnings call.

Nasser noted that global oil stocks are at their lowest level in five years and added that the crisis will lead to a faster decline and that the resumption of shipping in the strait is critical.

“It could have devastating consequences for world oil markets, and the longer the disruption lasts, the more severe the consequences for the global economy,” he said on Tuesday.

Nasser also stated that the small fire that broke out in the attack on the Ras Tanura refinery, Aramco’s largest refinery in the country, last week was quickly extinguished and brought under control, and added that the refinery is in the process of reactivating.

Iran’s Revolutionary Guard said on Tuesday it would not allow “a liter of oil” to be sent from the Middle East if US and Israeli attacks continue, prompting President Donald Trump to warn that the US would hit Iran much harder if it blocks exports from the vital energy-producing region.

His comments came after Aramco reported a 12 percent drop in annual profit, mainly due to lower crude oil prices.

It also announced that it would buy back US$3 billion ($4.2 billion) worth of shares in its first buyback.