Aramco CEO warns of 'catastrophic' oil market fallout if Hormuz closure continues

2026-03-10 - 23:52

The head of Saudi Arabia's state-owned oil conglomerate issued a dire warning Tuesday about the potential consequences of the ongoing closure of the Strait of Hormuz. Aramco CEO Amin Nasser told reporters that a sustained shutdown of the strategic waterway "could lead to catastrophic consequences for global oil markets," according to Saudi television Al Ekhbariya. Unprecedented challenge to energy sector Nasser characterized the current situation as "by far the largest challenge ever faced by the oil and gas sector in the region," highlighting the unprecedented nature of the disruption. The Strait of Hormuz was closed on March 2 following an announcement by Ebrahim Jabbari, an adviser to the commander of Iran's Revolutionary Guards, who warned that any ships attempting passage would be targeted. The closure has sent shockwaves through global energy markets and raised fears of prolonged supply constraints. Ripple effects across multiple industries The Aramco chief warned that the disruption to navigation in the vital waterway extends far beyond shipping and insurance costs, threatening wider repercussions for sectors including aviation, agriculture, and the automotive industry. The interconnected nature of global supply chains means that energy shortages could cascade through multiple economic sectors, potentially triggering broader economic disruption. Nasser noted that global oil inventories "are at their lowest level in five years and could decline more rapidly if the crisis continues." Oil prices volatile amid conflicting signals Oil markets have experienced extreme volatility since the crisis began, with prices briefly surging Monday to a record $120 per barrel before dropping Tuesday to around $92 following comments by US President Donald Trump suggesting the war could end soon. The price swings reflect market sensitivity to both the physical supply disruption and shifting expectations about the conflict's duration. In addition to closing the strait, Iran has launched attacks on US bases and interests in Gulf countries, Iraq, and Jordan, with some strikes hitting energy facilities and prompting production reductions that further tighten supplies and fuel inflation concerns worldwide.