• Saudi Aramco CEO Amin Nasser warns that a continued closure of the Strait of Hormuz could cut global oil supply by about 100 million barrels per week.
  • The market has already lost around 1 billion barrels due to the disruption, partly offset by alternative routes and reserves.
  • Nasser calls it the biggest energy supply shock ever, potentially delaying market normalization until 2027.

Unprecedented Supply Shock

The world faces an energy crisis of historic proportions as the Strait of Hormuz remains closed, threatening to remove up to 100 million barrels of oil from global markets each week. Saudi Aramco CEO Amin Nasser delivered the stark warning on Thursday, describing the situation as "the biggest energy supply shock ever" and cautioning that full market normalization could be delayed until 2027 if the disruption drags on.

Speaking at a conference in Riyadh, Nasser revealed that the market has already lost approximately 1 billion barrels since the chokepoint was shut, though he noted that alternative routes and strategic reserves have partially offset the shortfall. "Without a swift resolution, we are looking at a prolonged period of volatility and high prices," he said.

Aramco's Resilience Measures

Aramco is expanding non-Hormuz export routes to bolster resilience, including its Red Sea terminal, which can bypass the strait. The company, which produces roughly 7 million barrels per day, is redirecting flows to mitigate the impact. However, Nasser emphasized that these measures can only compensate for a fraction of the lost volume.

Efforts to secure a diplomatic solution have intensified, with multiple governments and international bodies pressing for a reopening. According to people familiar with the matter, negotiations remain fraught, and no deal appears imminent. "We are in constant contact with all parties, but the situation is fluid," a spokesperson for Aramco said, declining to provide further details. Attempts to reach representatives of regional governments for comment were unsuccessful.

The closure has already sent shockwaves through global oil markets, with crude prices surging and supply chains strained. Analysts warn that prolonged disruption could fuel inflation, raise transport costs, and dampen economic growth. "This is a stark reminder of the fragility of our energy infrastructure," said an industry analyst who asked not to be named. "The implications are enormous."

As the crisis unfolds, all eyes remain on the Strait of Hormuz, where the fate of global energy supply hangs in the balance.