Aramco CEO: Mideast Conflict Has Cost Global Market 2.6 Billion Barrels of Oil

The ongoing conflict in the Middle East has removed more than 2.6 billion barrels of oil from the global market since February, according to the chief executive of Saudi Aramco, who warned that global inventories are now running dangerously low. The lost supply, equivalent to nearly a month of normal global crude production, highlights the severe market impact of the closure of the critical Strait of Hormuz chokepoint.

Supply Shock Depletes Inventories

Saudi Aramco CEO Amin Nasser stated on Tuesday that the disruption has left the global energy system with few buffers. "If the Strait were to open today, it would take up to 18 months at an average rate of 2.1 million barrels a day to replenish depleted inventories," Nasser said, underscoring the long-term challenge facing the market even if the disruption ends.

Despite the unprecedented supply shock, Aramco, the world's largest oil exporter, reported a 44% increase in net profit to $32.69 billion for the second quarter. The company attributed the strong results to higher prices for crude and refined products, as well as its ability to reroute shipments and leverage its diverse asset base to maintain business continuity.

Conflict Widens to Red Sea

The supply crisis risks further escalation after Iran-aligned Houthi forces announced a blockade of Saudi Arabia's oil industry and targeted oil installations at two Red Sea ports last month. This development threatens a second critical shipping lane and the East-West Pipeline, a route Nasser has previously called a "critical lifeline" for bypassing the Strait of Hormuz.

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Nasser confirmed that recent attacks caused some production interruptions but said they had no material operational or financial impact, expressing confidence in Aramco's ability to restore operations quickly. The company's total hydrocarbon production averaged 9.5 million barrels per day in the second quarter, down from 12.8 million in the same period a year earlier.

System Vulnerabilities Exposed

The Aramco chief warned that the crisis has exposed deep vulnerabilities in the global refining system, with refineries worldwide operating near maximum capacity. He noted that the industry has few spare resources to absorb further shocks and that any significant unplanned refinery outage could place additional strain on global energy supplies.

Looking ahead, Nasser said Aramco could restore production to pre-conflict levels within days and reach its maximum sustained capacity of 12 million barrels per day within three weeks if requested. However, he voiced concern that continued disruption in the Strait of Hormuz and the Bab el-Mandeb Strait "could have a significant long-term impact on the world economy."