Saudi Arabia's state oil company Aramco has warned of severe consequences for the world's oil markets if the strait of Hormuz remains closed amid the ongoing US-Israeli conflict with Iran. While the firm can reroute around 70% of its crude exports through the east-west pipeline to the Red Sea and tap stored reserves, its CEO Amin Nasser said (via The Guardian) the disruption is "by far the biggest crisis the region's oil and gas industry has faced."
Oil shipments through the narrow waterway have been largely blocked since US strikes on Iran 11 days ago, removing roughly 20 million barrels from global markets daily. Prices briefly spiked to $119 a barrel before falling to $85 as investors reacted to statements from Donald Trump suggesting the conflict could end soon. Aramco is increasing shipments through its Red Sea pipeline to meet customer demand but cautioned that storage reserves are only a temporary solution.
The International Energy Agency and G7 leaders are monitoring the situation, with discussions underway about possible releases from emergency oil stockpiles to stabilize the market. Nasser stressed that if the disruption continues, the consequences for the global economy would be "drastic."