Aramco CEO: Hormuz closure drains 100M barrels weekly

Saudi Aramco Chief Executive Amin Nasser warned that repeated closures of the Strait of Hormuz are removing roughly 100 million barrels of oil from global markets each week, pushing cumulative losses close to 1 billion barrels. The Strait links the Persian Gulf to the open ocean and handles about one-fifth of the world’s daily oil shipments.

Nasser projected that if flow restrictions persist for several more weeks, oil markets may not stabilize until 2027. He noted most of the world’s spare oil production capacity is located in the Persian Gulf, the region affected by the transit disruptions.

Countries and companies have responded by rerouting some shipments along longer routes and by releasing oil from strategic petroleum reserves to fill short-term gaps. Alternative routes increase transit time and cost, and strategic reserves are limited in size.

Saudi Aramco reported a 26% rise in first-quarter profits, which the company attributed in part to higher oil prices as supply tightened. Constrained supply has raised prices, benefiting producers with operating facilities.

Market behavior has shifted in response to the disruption. During past panic events, Bitcoin has tended to move with broader risk assets. A sustained rise in global energy costs raises operating expenses for electricity-intensive activities such as Bitcoin mining, compressing miners’ profit margins.

Higher energy costs can force less efficient mining operations to shut down, reducing global hashrate and creating volatility in mining stocks and in the price of Bitcoin.

Most spare production capacity is concentrated in the Persian Gulf and exports depend on the Strait of Hormuz.