World’s largest oil exporter company Saudi Aramco on Tuesday warned that there would be “catastrophic consequences” for the global economy if the war in West Asia continues to choke crude supplies through the Strait of Hormuz.
According to a report by Reuters, the chief executive of the Saudi Arabia-based oil giant, Amin Nasser, said in an earnings call that the impact of the war would not be limited to just shipping and insurance sectors.
“There would be catastrophic consequences for the world’s oil markets the longer the disruption goes on, and the more drastic the consequences for the global economy,” he was quoted as saying.
The drastic domino effects of the conflict would be visible across sectors, be it aviation, agriculture, automotive or any other industry.
Emphasising the need to resume oil transit through the Strait, he pointed out that global oil inventories were already at a five-year low and the Iran war would only fast-track the depletion of reserves.
Nasser’s comments have come when both sides in the war have vowed to continue attacking each other’s assets in the region. Iran’s Revolutionary Guards on Tuesday said that it would not allow even “one litre of oil” to be shipped from West Asia if the United States-Israel duo continued to attack.
The comment has not gone down well in Washington where President Donald Trump warned that the United States would hit Iran much harder if it tried to block exports from the Gulf.
Since the war started in late February, both sides have targeted the crude production units of each other. Shipments through the Hormuz Strait, through which 20 percent of world supplies take place, have also been blocked.
Iran has not only attacked Israel but also other Gulf nations aligned with the US. Bahrain, Qatar and Saudi Arabia are among the nations to face attacks on their crude units.
Aramco’s Ras Tanura refinery, its largest domestically, also came under attack last week leading to a shutdown. Nasser said that the fire from the attack was extinguished and the refinery was in the process of being restarted.
