Amin H. Nasser, president and CEO of Aramco. (Image source: Aramco)

Aramco CEO Amin H. Nasser has warned of ‘catastrophic consequences’ for the oil markets and the global economy if the conflict in the Middle East continues

Speaking in a media call for the energy giant’s 2025 full year financial results, he said, “Global spare capacity is mostly concentrated in this region, so it’s absolutely critical that shipping resumes in the Straits of Hormuz.

“The disruption has caused a severe chain reaction in not only shipping and insurance but there’s also a drastic domino effect on aviation, agriculture, automotive and other industries,” Nasser continued.

“While we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced.”

Nasser gave assurances that Aramco has contingency plans in place for various scenarios, crises and challenges to ensure it continues to deliver to its customers, leveraging its significant operational capabilities, and the flexibility of its advantaged infrastructure and network in Saudi Arabia and globally.

The company is managing to reroute some of its crude exports via the East-West pipeline to the port of Yanbu on the Red Sea to bypass the Strait of Hormuz, but this is now close to capacity and is unable to fully compensate, with 3-4mn bpd of Saudi exports remaining exposed to the closure, according to Rystad Energy.

While Saudi Arabia is reported to have begun reducing oil production in response to the crisis, Nasser said at the earnings call that Aramco could restore output in days rather than weeks once the Strait of Hormuz reopened.

Aramco has also said its Ras Tanura refinery, one of the Kingdom’s key refining hubs, is restarting after sustaining limited damage from debris from intercepted drones.

2025 results

Aramco reported profits of US$104.7bn in 2025, down from US$110.3bn in 2024, reflecting a lower average oil price of US$69.2 compared with US$802 the previous year. It recorded capital expenditure of US$50.8bn, up slightly from US$50.4bn the previous year.

In terms of operations, Aramco reported significant progress in expanding gas production capacity, with start of production at Jafurah in December 2025, and commencement of operations at Tanajib Gas Plant. The two plants will provide about 1.3bn standard cubic feet per day of combined sales gas production capacity. Jafurah Phase II and the Fadhili Gas Plant expansion are set for 2027 completion, while the Master Gas System Phase III is progressing, and due to add 3.15bn standard cubic feet per day of transmission capacity by 2028. The Marjan crude oil increment was brought onstream and water injection operations commenced at Berri crude oil increment, while on the exploration front, Aramco discovered six new fields and two new reservoirs of Arabian oil.

Downstream, the energy giant is progressing towards its long-term target of 4mn barrels per day of liquids-to-chemicals capacity, with Shaheen in South Korea, Amiral in Saudi Arabia and HAPCO projects in China, which are under development and on track for completion in 2026 and 2027.

Nasser said, “Aramco delivered robust growth and strong cash flows in 2025, reinforcing confidence in our strategy. Our disciplined capital allocation, combined with our lower-cost, adaptable, and highly-reliable operations, drove strong financial performance in a year marked by price volatility. This enabled a 3.5% increase to our base dividend, reinforcing our focus on delivering sustainable and progressive shareholder returns.

“We continue to leverage advanced technologies including AI to enhance efficiency and unlock value across our business. We also continued to maintain our impressive safety track record in 2025, with our lowest total recordable case rate since the IPO.

“Following another year of record oil demand in 2025, we believe ongoing investments in our operations position us well for the future…Our strong project momentum underscores potential for future operating cash flow growth, creating further opportunities and reinforcing our position as a global energy leader.”

Fatih Birol, IEA executive director. (Image source: IEA)

The 32 Member countries of the International Energy Agency have agreed to make 400 million barrels of oil from their emergency reserves available to the market, the largest release of emergency oil stocks in the Agency’s history, to address the loss of supply stemming from the war in the Middle East and the effective closure of the Strait of Hormuz

In a statement, IEA executive director Fatih Birol noted that the conflict in the Middle East is having a significant impact on global oil and gas markets, with major implications for security, affordability and the global economy.

The conflict in the Middle East that began on 28 February 2026 has impeded oil flows through the Strait of Hormuz, with export volumes of crude and refined products currently at less than 10% of pre-conflict levels. Without sufficient routes to market and without sufficient storage, regional operators have been forced to shut in or curtail a substantial amount of production. They are also experiencing attacks on their energy and energy-related infrastructure.

An average of 20 million barrels per day of crude oil and oil products transited the Strait of Hormuz in 2025, or around 25% of the world’s seaborne oil trade. Options for oil flows to bypass the Strait of Hormuz are limited.

Refinery operations are also being disrupted, with implications for the jet fuel and diesel supplies.

“The situation of the natural gas markets is challenging, with few options to replace LNG cargoes from Qatar and the UAE. These have been reduced by 20%, leaving balances even tighter than for oil,” Birol remarked. Asia has been the most profoundly affected, and is forced to compete with other markets for LNG cargos.

“The oil market challenges we are facing are unprecedented in scale, therefore I am very glad that IEA Member countries have responded with an emergency collective action of unprecedented size,” said  Birol. “Oil markets are global, so the response to major disruptions needs to be global too. Energy security is the founding mandate of the IEA, and I am pleased that IEA Members are showing strong solidarity in taking decisive action together.”

While this will alleviate the immediate disruption, the most important thing is to stabilise flows and allow traffic to resume through the Strait of Hormuz, he said.

The emergency stocks will be made available to the market over a timeframe that is appropriate to the national circumstances of each Member country and will be supplemented by additional emergency measures by some countries.

IEA members hold emergency stockpiles of over 1.2 billion barrels, with a further 600 million barrels of industry stocks held under government obligation. The coordinated stock release is the sixth in the history of the IEA, which was created in 1974. Previous collective actions were taken in 1991, 2005, 2011, and twice in 2022.

The IEA Secretariat will provide further details of how this collective action will be implemented in due course. It will also continue to closely monitor global oil and gas markets and to provide recommendations to Member governments, as needed.

“The IEA will continue its mission of upholding energy security, as we have done today for the oil markets, and will continue to do across the entire energy sector,” Birol concluded.

Brent and WTI prices pushed past US$115 a barrel on 9 March 2026. (Image source: GlobalData)

As Brent and WTI prices pushed past US$115 a barrel on 9 March 2026, the world was in for a major supply shock

“The latest price spike indicates that the market is rapidly transitioning from pricing in a logistics disruption to factoring in a potential supply shock. Initially, traders reacted to maritime risks in the Strait of Hormuz, which raised shipping costs and delayed cargoes. However, recent developments suggest that actual production and export volumes across key Gulf producers are now at risk, fundamentally tightening global supply expectations," said Jaison Davis, economic research analyst at GlobalData, an intelligence and productivity platform. 

He went on to explain how the sharp price rise exposed the market’s spare capacity buffer. "Even relatively small disruptions to Gulf production can trigger outsized price movements because the region accounts for a disproportionate share of globally traded crude," Davis said. 

“The current surge in prices also reflects the concentration risk within the global oil system. A large share of exports from Saudi Arabia, Iraq, Kuwait, and the UAE passes through the Strait of Hormuz, leaving global energy supply exposed to geopolitical disruptions in a single maritime corridor. Financial markets have already begun pricing in the broader macroeconomic consequences of the oil shock, including rising inflation expectations, currency volatility, and pressure on equity markets across energy-importing economies," he said.

Duration remains the most influential determining factor at this point. While prices may find balance if stability is restored in the Strait of Hormuz, it can easily lead to a structural supply deficit situation if there's no end in sight for the conflict.

“At the same time, should GCC states, along with Turkey, manage to influence the US and international diplomatic channels toward de-escalation, markets may begin to unwind some of the current geopolitical risk premiums. Tanker flows through the Strait of Hormuz could stabilise, insurance and freight costs could moderate, and production cuts could be reversed, gradually pushing oil prices closer to pre-crisis levels. Residual volatility would likely persist, but a credible ceasefire or mediation effort could alleviate worst-case supply fears and ease pressure on energy-importing economies.

"Nonetheless, oil markets will remain acutely sensitive to developments in the Gulf region. Pricing dynamics are increasingly shaped by security conditions and the resilience of export routes through the Strait of Hormuz. Even with short-term stabilisation in shipping, any lingering disruption to production, infrastructure, or tanker traffic risks sustaining elevated volatility, as well as renewed inflationary pressures for oil-importing countries,” said Davis. 

New developments have driven oil prices sharply higher

A wave of force majeure declarations has swept through the Middle East's energy sector this month as the ongoing US-Israel war with Iran disrupts production, shipping, and exports across the Gulf region, writes Sania Aziz. 

The declarations, which relieve companies from contractual obligations due to unforeseen events beyond their control, stem from Iranian retaliatory attacks on facilities, threats to maritime routes, and the near-total blockage of the Strait of Hormuz, which is a vital chokepoint for one-fifth of global oil supplies.

QatarEnergy, the world's largest liquefied natural gas (LNG) exporter, was among the first to act. On 4 March, the state-owned firm declared force majeure on LNG shipments after halting production at key facilities in Ras Laffan and Mesaieed following Iranian drone strikes.

The company cited attacks on its infrastructure and the inability to operate safely, with sources indicating restarts could take weeks or longer to avoid equipment damage.

Qatar supplies around 20% of global LNG, and the move has sent shockwaves through Asian and European markets reliant on these deliveries.

Kuwait Petroleum Corporation (KPC) followed suit on 7 March, declaring force majeure on crude oil and product exports while slashing output.

The decision was prompted by explicit Iranian threats to shipping safety in the Strait of Hormuz, ongoing regional attacks, and a severe shortage of available vessels in the Gulf.

KPC, a major naphtha and jet fuel supplier to Asia and Europe, cited these factors as making normal operations impossible.

Bahrain's Bapco Energies joined the list today, 9 March, announcing force majeure on group operations after an Iranian strike set its Sitra refinery ablaze, which is the kingdom's sole refining complex.

The company assured that domestic supplies remain secure under contingency plans, but exports and broader activities are severely impacted by the conflict.

Aluminium Bahrain (Alba), operator of one of the region's largest smelters, declared force majeure earlier in March on shipments.

Unlike others, Alba stressed that its facilities remain undamaged; the issue lies solely in halted shipping through the Strait of Hormuz, preventing outbound metal deliveries despite continued production.

The ripple effects extend beyond Gulf producers. China's Wanhua Chemical declared force majeure on for supplies to Middle East customers, blaming severe regional shipping disruptions.

These developments have driven oil prices sharply higher and raised fears of prolonged supply shortages.

Analysts warn that further escalations could prompt additional declarations from Saudi Arabia, the UAE, and others as storage fills and export routes remain blocked.

The situation remains fluid, with global energy markets on high alert.