Facing a loss of supply of about one billion barrels of oil, the Aramco boss warns that the imbalances could persist in the medium term.
The global oil market may not regain its balance before 2027. This alarming scenario was put forward by the head of the Saudi giant Aramco, in a context of ongoing Middle East war that continues to disrupt international energy flows and drive prices higher.
During a discussion with investors, CEO Amin Nasser described an unprecedented situation for the global oil industry, referring to the “biggest energy shock” ever experienced. “Even if the Strait of Hormuz were to reopen today, it would take months for the market to rebalance, and if its reopening were delayed by a few additional weeks, a return to normalcy would extend until 2027,” he stated.
In the midst of this tension, the conflict between the United States and Israel against Iran led to the partial closure of the Strait by Tehran in retaliation, causing a sudden contraction in global supply. The impact is even more severe as global strategic reserves have been substantially reduced by several months of disruptions. Amin Nasser estimates that the market has already experienced “an unprecedented loss of supply of about one billion barrels of oil,” a deficit partially offset by alternate routes, but insufficient to ease the pressure on prices.
In this context, the price of Brent crude experienced significant volatility, averaging nearly $100 in March, compared to about $70 before the hostilities began, with peaks reaching $120.
Beyond the Strait of Hormuz, energy infrastructure in the Gulf has also been targeted. Oil facilities in Saudi Arabia as well as Aramco’s east-west pipeline were hit in the Iranian retaliatory strikes against American-Israeli attacks.
Despite these attacks, the Saudi group maintained its exports through alternative infrastructures. Its strategic pipeline connecting the Gulf to the Red Sea has played a crucial role, recently reaching its maximum capacity of 7 million barrels per day.
Aramco also announced a 25.5% increase in its net profit in the first quarter, driven by the surge in oil prices in a tense market.
Anticipating an extended period of imbalance, the oil group foresees continued demand rationing as long as supply disruptions in the Strait of Hormuz persist. “We expect the rationing of demand to continue as long as supply through the Strait of Hormuz remains disrupted,” explained Amin Nasser, who also warns of a possible sharp rebound in demand when normalcy returns.
According to him, the full reopening of maritime traffic could trigger a strong wave of strategic stock replenishment by states and energy companies, temporarily accentuating the pressure on global supply. “If trade and maritime transport resume normally, we anticipate a strong recovery,” he added.
