Aramco Sees Slow Oil Market Recovery after Shock Supply Loss
Reuters Survey Shows OPEC Oil Output At 26-Year Low Amid Iran War Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
The oil market will take months to normalize even if flows through the Strait of Hormuz resumed today, as 1 billion barrels of oil have been wiped off the supply balance over the past two and a half months.
That’s the verdict on the global oil markets of Amin Nasser, chief executive officer of Saudi Arabia’s state oil giant and the world’s single largest crude oil exporter, Saudi Aramco.
“Reopening routes is not the same as normalizing a market that has been deprived of about one billion barrels of oil,” Nasser toldReutersin statements this weekend after the Saudi oil giant reported consensus-beating Q1 earnings despite the closure of the Strait of Hormuz for a full month in the first quarter.
In comments on the results, Nassersaidin the Aramco press release that the company showed strong operational flexibility in re-routing exports through the East-West pipeline to the Yanbu export port on the Red Sea, which bypasses the closed-off Strait of Hormuz.
“Our East-West Pipeline, which reached its maximum capacity of 7.0 million barrels of oil per day, has proven itself to be a critical supply artery, helping to mitigate the impact of a global energy shock and providing relief to customers affected by shipping constraints in the Strait of Hormuz,” Nasser said.
Related: Europe's Renewable-Plus-Battery Market Set to Quintuple by 2030 Apart from flexibility to serve customers despite the closure of the world’s biggest oil chokepoint, Nasser also touted the importance of oil and gas in global economic growth.
“Recent events have clearly demonstrated the vital contribution of oil and gas to energy security and the global economy, and are a stark reminder that reliable energy supply is critical,” Aramco’s top executive said.
The shock supply lossis draining inventoriesacross all markets, with some regions and countries, especially in Asia, already under severe stress to procure oil supply.
The 1-billion-barrel loss, and counting, from global supply will reverberate through the oil market for months to come, even if the Strait of Hormuz opened unconditionally to free tanker traffic soon.
This prospect, however, appeared distant as of early on Monday, as U.S.
President Donald Trumprejectedthe Iranian response to a U.S.-drafted peace proposal.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | ▲ +0.34% |
| WTI Crude | $96.90/bbl | ▲ +0.21% |
| EN590 Diesel | $846/MT | ▲ +0.18% |
| Jet Fuel A-1 | $1090/MT | ▲ +0.55% |
| Mazut M100 | $450/MT | ▼ -0.15% |
| Bitumen 60/70 | $470/MT | ▲ +0.08% |
| Sulphur Gran 99.5% | $470/MT | ▼ -0.44% |
| Urea 46% Gran | $650/MT | ▲ +1.12% |
| NPK 16-16-16 | $460/MT | ▼ -0.28% |
| Nat Gas TTF | $15.42/MMBtu | ▲ +0.92% |
Price alerts · Industry news
Comments
Post a Comment