Ziggy Ojiegbe

The Chief Executive Officer of Saudi Aramco, Amin Nasser, has warned that continued disruptions to global energy supply could have “catastrophic” consequences for the world economy as tensions in the Middle East escalate.

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Speaking to analysts and investors on Tuesday, Nasser described the ongoing conflict involving Iran as the biggest crisis the region’s oil and gas industry has faced in decades.

“The disruption has caused a severe chain reaction not only in shipping and insurance, but also across aviation, agriculture, automotive, and other industries,” Nasser said.

“There would be catastrophic consequences for the world’s oil markets the longer the disruption continues, and the more severe the consequences for the global economy.”

To maintain supply, Aramco has increased the volume of crude it transports through the East–West pipeline across Saudi Arabia to the Red Sea. The pipeline is one of the few routes that allows oil exports to bypass the critical Strait of Hormuz.

Nasser said the pipeline has a capacity of up to seven million barrels per day and that Aramco expects to reach full capacity within days.

He added that if the company were forced to reduce production to the amount that can be transported through the pipeline, it could restore output to normal levels within days once conditions stabilize. This could reassure investors concerned that production shutdowns might take weeks or months to reverse.

Oil prices have been highly volatile since the escalation of the conflict involving Iran, the United States, and Israel.

Futures for the global benchmark Brent crude and the US benchmark West Texas Intermediate crude were trading at about $87.60 and $90 per barrel respectively.

Both benchmarks opened above $100 per barrel on Sunday after US–Israeli strikes on Iran. Prices briefly surged to nearly $119 before plunging on Monday after Donald Trump said he believed the conflict could soon end, prompting investors to unwind the so-called “war premium” built into oil prices.

However, analysts warn that political statements alone may not resolve the severe logistical bottlenecks currently affecting global energy markets.

The Strait of Hormuz — a narrow maritime corridor responsible for roughly 20 percent of global oil flows — remains closed to shipping.

Meanwhile, several major energy facilities across the Middle East have been shut down as a precaution.

The Ruwais Refinery in the United Arab Emirates, capable of processing about 900,000 barrels of oil per day, was taken offline following airstrikes. Earlier in the week, Bapco Energies shut down Bahrain’s only refinery.

Across the region, oil production shutdowns in Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates now total about 6.7 million barrels per day—roughly six percent of global supply.

Energy analysts warn that if the conflict drags on and the Strait of Hormuz remains closed, the impact on global energy supply could deepen, pushing oil prices higher and worsening inflation pressures worldwide.