Saudi Arabia: Global Oil Market Crisis Could Last Until 2027

JAKARTA - The global oil market will not return to normal until next year unless shipping traffic in the Strait of Hormuz resumes within a month, the world's largest state-owned energy company, Aramco, said.

"The longer the supply disruption continues, even just a few additional weeks, it will take much longer for the oil market to return to balance and stability," Saudi Aramco CEO Amin Nasser said in a video conference discussing Saudi Aramco's first-quarter results.

According to him, this crisis could last until 2027 if the impasse that has been occurring in the Strait of Hormuz continues until mid-June.

Markets that have already lost a billion barrels of oil due to disruptions in production or transportation will continue to lose about 100 million barrels of oil each week as long as the strait remains closed.

As reported by ANTARA from Sputnik, Nasser also reminded that previously around 70 ships per day passed through the Strait of Hormuz.

Attacks on oil-producing countries in the Persian Gulf and Iran's effective closure of the strait - a route through which one-fifth of the world's oil and gas supplies pass - have had a negative impact on both production and export activities of the oil and gas sector.

Before the conflict broke out on February 28, about 20 million barrels of oil per day entered the market through these waterways.

On February 28, the United States and Israel launched an attack on targets in Iran that caused damage and civilian casualties. On April 7, Washington and Tehran announced a two-week ceasefire.

Further talks in Islamabad ended without results, and US President Donald Trump extended the cessation of hostilities to give Iran time to submit a "unified proposal".

The escalation of the conflict almost halted traffic in the Strait of Hormuz, an important route for the shipment of oil and liquefied natural gas from Persian Gulf countries to global markets, thus pushing up fuel prices.

Then on May 3, Trump announced Project Freedom to help ships stuck in the Strait of Hormuz and wanting to leave the region.

But on May 5, Trump said he decided to suspend the operation temporarily to see if a peace deal with Iran could be reached.

Furthermore, on May 11, Trump called Tehran's response to the US peace proposal something that was completely unacceptable.