Saudi Aramco’s boss warned of a long disruption to oil markets from the near closure of the Strait of Hormuz, while the company reported a jump in profit following higher prices and its ability to redirect exports via a pipeline bypassing the vital waterway.
“If trade flows resume immediately or today through the Strait of Hormuz, it will take a few months for the oil market to rebalance,” Aramco’s Chief Executive Office Amin Nasser said in emailed comments. “But if trade and shipping remain curtailed by more than a few weeks from today, we anticipate the supply disruption to persist, and the market to normalize only in 2027.”
The comments highlight the deepening risk for the oil market with the conflict in the Middle East now into its third month and the US and Iran showing little progress in negotiations aimed at opening flows. The hostilities have thrown markets into disarray with traffic through Hormuz remaining at a near standstill and oil prices hovering close to $100 a barrel.
Higher prices of crude and refined products helped Aramco report a 26% increase in first-quarter adjusted net income, which at 126 billion riyals also beat analysts’ expectations. It maintained dividend payout that are crucial for the Saudi economy. The company said it sold higher volumes of crude, refined fuels and chemical products compared with a year earlier.
