Aramco: Hormuz Crisis Could Shake Global Oil Markets Until 2027

Doha (ANTARA) - The global oil market will not return to normal until next year unless shipping traffic in the Strait of Hormuz resumes operations within one month, stated Saudi Aramco, the world’s largest state-owned energy company in Saudi Arabia.

“The longer the supply disruption continues, even for just a few additional weeks, the much longer it will take for the oil market to rebalance and stabilise,” said Saudi Aramco CEO Amin Nasser during a video conference discussing the company’s first-quarter results.

He added that this crisis could persist until 2027 if the ongoing deadlock in the Strait of Hormuz continues until mid-June.

A market that has already lost one billion barrels of oil due to disrupted production or transportation will continue to lose around 100 million barrels of oil each week while the strait remains closed, he stated.

Nasser also reminded that previously, around 70 ships passed through the Strait of Hormuz per day.

Attacks on oil-producing countries in the Persian Gulf, as well as the effective closure of the strait by Iran—a route carrying one-fifth of the world’s oil and gas supply—have had a negative impact on both production and export activities in the oil and gas sector.

Before the conflict erupted on 28 February, approximately 20 million barrels of oil per day entered the market through this waterway.

On 28 February, the United States and Israel launched attacks on targets in Iran, causing damage and civilian casualties. On 7 April, Washington and Tehran announced a two-week ceasefire.

Subsequent talks in Islamabad ended without results, and US President Donald Trump extended the cessation of hostilities to give Iran time to submit a “comprehensive proposal”.

The escalation of the conflict nearly halted traffic in the Strait of Hormuz, a vital shipping route for oil and liquefied natural gas from Persian Gulf countries to global markets, thereby driving up fuel prices.

Then, on 3 May, Trump announced Project Freedom to assist ships trapped in the Strait of Hormuz that wished to exit the area.

However, on 5 May, Trump stated that he had decided to suspend the operation temporarily to see if a peace agreement with Iran could be reached.

Subsequently, on 11 May, Trump described Tehran’s response to the US peace proposal as completely unacceptable.

Source: Sputnik/RIA Novosti