Saudi oil giant Aramco says prolonged disruption to Strait of Hormuz shipping would have catastrophic consequences for global oil markets and the wider economy.

DUBAI: Saudi Arabia’s state oil giant, Aramco, has issued a stark warning over the escalating crisis in the Strait of Hormuz.

Chief executive Amin Nasser said there would be “catastrophic consequences” for global oil markets if shipping disruptions in the vital waterway continue. He told reporters the crisis would have drastic domino effects on aviation, agriculture, automotive and other industries.

Global oil inventories are already at a five-year low. Nasser warned the current disruption would lead to faster drawdowns of these stocks.

“It was critical that shipping in the strait resumed,” he said. “The longer the disruption goes on, and the more drastic the consequences for the global economy.”

The disruption has severely impacted the global shipping and insurance sectors. Nasser’s comments follow an attack last week on Aramco’s Ras Tanura refinery, its largest domestic facility.

He confirmed a small fire from that attack was quickly extinguished. The refinery is now in the process of being restarted.

Iran’s Revolutionary Guards said on Tuesday they would not allow “one litre of oil” to be shipped from the Middle East if US and Israeli attacks continue. This prompted a warning from US President Donald Trump that Washington would hit Iran “much harder” if it blocked exports.

Aramco recently reported a 12% drop in annual profit, mainly due to lower crude prices. The company also announced its first-ever share buyback, planning to repurchase up to USD 3 billion worth of shares.

 The Sun Malaysia