Global oil markets are losing 100 million barrels every week that the Strait of Hormuz remains closed, as a result of the U.S.-Israeli war on Iran, the head of Saudi Arabia’s state oil producer said on May 11. “The energy supply shock that began in the first quarter is the largest the world has ever experienced,” Saudi Aramco chief executive officer Amin Nasser told analysts on an earnings call, reported Middle East Eye.
Nasser said the world is coping with the shock through “demand rationing” of available supplies. “We expect demand rationing to continue as long as supply remains disrupted through the Strait of Hormuz. If normal trade and shipping resume, we anticipate a very robust return to demand growth,” Nasser said.
Nasser also reportedly echoed other CEOs and energy experts who have said there is a disconnect between the physical price of oil and what is being traded in the futures market. As of May 11, Brent crude futures for July delivery are trading at around $105 per barrel. However, the price customers are paying for oil in the real world is substantially higher.
