Aramco warns of 'catastrophic' consequences for oil in the Strait of Hormuz if shipping is not resumed

Saudi Arabia's Aramco, the world's largest oil exporter, said on Tuesday there would be "catastrophic" consequences for the oil markets of the world if the Iran War continues to disrupt shipping through the Strait of Hormuz.

Aramco CEO Amin Nasser said on a earnings call that the disruption will not only have a drastic impact on the aviation, agricultural, automotive, and other industries but will also have 'dramatic domino effects' on them.

Nasser said that global oil inventories were at their lowest level in five years and that the crisis would lead to a rapid drawdown. He added that it was vital that shipping resume in the Strait.

He said that "there would be catastrophic consequences" for the world's energy markets. The longer the disruption continues, the worse the effects will be on the global economy.

Nasser said that a small fire caused by an attack on Aramco’s Ras Tanura Refinery, the company's largest refinery in the country, was quickly put out and brought under control. He added that the refinery is currently being restarted.

Iran's Revolutionary Guards said on Tuesday that they would not permit "one litre" of oil to be shipped from the Middle East, if U.S. attacks and Israeli attacks continued. This prompted a warning by President Donald Trump?that the U.S. will hit Iran harder if it blocks exports from this vital energy producing region.

His comments follow Aramco's announcement of a 12% drop in its annual profit, mainly because of lower crude oil prices. It also announced that it would buy back up to $3 billion in shares as part of its first ever buyback. (Reporting and writing by Yousef SABA and Maha El DAHAN; editing by Edwina G. Gibbs).

(source: Reuters)