Saudi Aramco has delivered one of the starkest warnings yet about the fallout from the U.S.-Iran war, saying the global oil market has effectively lost around one billion barrels of supply over the past two months and that the resulting energy shock will not disappear quickly even if diplomacy eventually succeeds.
The comments from Aramco CEO Amin Nasser underscore how the conflict has evolved far beyond a regional military confrontation into a structural crisis for the global energy system, exposing vulnerabilities in shipping routes, inventories, and long-term energy investment.
“Our objective is simple: keep energy flowing, even when the system is under strain,” Nasser said in a statement after the company posted stronger-than-expected first-quarter earnings.
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But he cautioned that markets were underestimating the depth of the disruption already inflicted on global supply chains.
“Reopening routes is not the same as normalizing a market that has been deprived of about one billion barrels of oil,” Nasser said.
The figure is significant because it points to how cumulative supply disruptions are beginning to reshape the balance of global energy markets. The world is no longer dealing with a short-term shipping interruption. Instead, traders and analysts increasingly view the Hormuz crisis as a prolonged supply shock capable of influencing inflation, industrial production, and central bank policy well into next year.
The Strait of Hormuz, through which roughly 20% of the world’s oil supply normally passes, has remained severely constrained after Iran tightened control over shipping lanes during the war. The blockade has disrupted exports from major Gulf producers, sent insurance premiums surging, and forced shipping companies to reroute vessels at far higher cost.
The consequences are now spreading through the wider global economy. Airlines are paying sharply more for jet fuel, freight companies are facing escalating bunker fuel costs, and manufacturers are seeing rising transportation and petrochemical expenses feeding into consumer prices.
The crisis has revived memories of historic oil shocks that triggered wider economic slowdowns and inflationary spirals. What makes the current situation more dangerous, according to energy executives, is that global spare capacity and inventories were already under pressure before the war began.
Nasser pointed directly to that problem.
He said “years of underinvestment” had compounded pressure on already-low global stockpiles, suggesting the market entered the conflict with little margin for error.
That statement reflects a growing argument among major oil producers that the global push toward energy transition discouraged investment in conventional oil infrastructure too aggressively, leaving the market vulnerable to geopolitical disruptions.
The crisis is now strengthening the hand of oil-producing nations that have long argued energy security should take priority over rapid decarbonisation efforts.
For Saudi Arabia, the conflict has also highlighted the enormous strategic importance of infrastructure that bypasses the Strait of Hormuz. Aramco has increasingly relied on its East-West Pipeline, which transports crude from Saudi Arabia’s Gulf coast to the Red Sea port of Yanbu. The system allows exports to continue without passing through Iranian-controlled waters.
Nasser described the pipeline as essential to stabilizing global supply.
“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,” he said.
The infrastructure has effectively become one of the most strategically valuable energy assets in the world during the conflict. Few countries possess alternative export routes of similar scale. That advantage has allowed Saudi Arabia to continue supplying key Asian customers even as regional shipping flows remain constrained.
Still, the strain is becoming increasingly evident.
Saudi Arabia has cut production by around 2 million barrels per day during the crisis after Iran’s blockade disrupted wider Gulf export operations. The East-West Pipeline is now operating at full capacity, with about 5 million barrels per day available for export after domestic refinery demand is met.
Aramco’s Q1 Result and What Lies Ahead
Aramco reported first-quarter net profit of $32.5 billion, a 25% increase from a year earlier and above analyst expectations. Revenue climbed nearly 7% to $115.49 billion as higher oil prices and stronger refined-product sales offset broader market instability.
The earnings demonstrate how major oil exporters are financially benefiting from elevated prices even as the wider global economy absorbs mounting costs.
Aramco also announced a first-quarter dividend of $21.9 billion, up 3.5% year-on-year, reinforcing the company’s role as the financial engine of the Saudi state.
The Saudi government directly owns more than 81% of Aramco, while the kingdom’s Public Investment Fund controls another 16%. That means Aramco’s cash generation is central to financing Crown Prince Mohammed bin Salman’s massive domestic spending agenda and Vision 2030 economic diversification projects.
Yet beneath the strong earnings lies growing anxiety about the durability of global demand. Nasser stressed that “reliable energy supply is critical,” a comment that increasingly appears aimed not only at customers but also at policymakers pushing aggressive shifts away from fossil fuels.
Energy executives fear that prolonged high prices could eventually trigger the same pattern seen during previous oil crises: slowing economic growth, weaker consumer demand, and eventual recession.
Already, economists are warning that higher fuel and shipping costs are beginning to feed into a broader second wave of inflation across major economies.
The situation also carries major geopolitical implications. The Hormuz crisis has stoked Asia’s vulnerability to Middle Eastern supply disruptions, particularly for countries such as China, India, Japan, and South Korea that remain heavily dependent on Gulf crude.
Nasser reiterated that Asia remains central to Aramco’s long-term strategy, signaling Saudi Arabia intends to preserve and deepen its dominance in the region even as global energy politics become more fragmented.
Even if a peace deal is eventually reached, restoring confidence in shipping routes, rebuilding depleted inventories, and stabilizing pricing mechanisms may take months. And with spare capacity already stretched thin, energy markets are entering that uncertain period with little room left for another shock.