Oil giant warns of catastrophe over disrupted shipping
The world’s biggest oil exporter is warning 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 create serious domino effects on aviation, agriculture, automotive and other industries, Amin Nasser, CEO of Saudi Arabia’s Aramco, told reporters on an 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 last week as a result of the attack on the Ras Tanura refinery, Aramco’s largest refinery in the country, was quickly extinguished and taken under control, and added that the refinery is in the process of restarting operations.
Iran’s Revolutionary Guard said on Tuesday that it would not allow “a liter of oil” to be shipped 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.
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