Aramco warns of ‘catastrophic’ consequences for oil market if Hormuz closure persists

Saudi oil giant Aramco warned Tuesday of "catastrophic" consequences for global oil markets if the closure of the Strait of Hormuz continues amid a US-Israeli offensive on Iran.

Speaking at a press conference, Aramco CEO Amin Nasser said a prolonged shutdown of the strait "could lead to catastrophic consequences for global oil markets," according to the Saudi television Al Ekhbariya.

On March 2, Ebrahim Jabbari, an adviser to the commander of Iran's Revolutionary Guards, announced that the Strait of Hormuz had been closed, warning that any ships attempting to pass through would be targeted.

Nasser described the current crisis as "by far the largest challenge ever faced by the oil and gas sector in the region."

He said the disruption of navigation in the Strait of Hormuz has affected not only shipping and insurance but also threatens wider repercussions for sectors such as aviation, agriculture and the automotive industry.

Global oil inventories "are at their lowest level in five years and could decline more rapidly if the crisis continues," he warned.

Oil prices briefly surged Monday to a record $120 per barrel before dropping Tuesday to around $92 after comments by US President Donald Trump suggesting the war could end soon.

In addition to closing the Strait of Hormuz, a key transit route for oil tankers, Iran has launched attacks on what it says are US bases and interests in Gulf countries, Iraq and Jordan.

Some of those attacks have struck energy facilities, prompting several countries to reduce production, driving energy prices higher and raising fears of worsening inflation worldwide.

Regional escalation has flared since Feb. 28 when Israel and the US launched a joint attack against Iran, killing more than 1,200 people and injuring another 10,000, according to Iranian authorities.