Aramco Warns Of ‘Catastrophic’ Oil Market Impact As West Asian Energy Majors Raise Alarm

Last Updated:March 10, 2026, 19:17 IST

From Riyadh to Doha, oil bosses are sounding the alarm. With the Strait of Hormuz shut and inventories at 5-year lows, the world's economy is on the edge.

The world’s biggest oil companies and state energy giants sounded a stark alarm on Tuesday over the growing crisis in the Gulf, warning that the near-total closure of the Strait of Hormuz by Iran, triggered by the ongoing US-Israel-Iran war, could bring catastrophic consequences for the global economy, as producers from Saudi Arabia to Bahrain scramble to cut output and invoke force majeure.

Aramco: ‘By Far the Biggest Crisis’

Saudi Aramco CEO Amin Nasser told reporters on an earnings call that the current disruption was “by far the biggest crisis the region’s oil and gas industry has faced." Reuters reported him as saying: “There would be catastrophic consequences for the world’s oil markets and the longer the disruption goes on… the more drastic the consequences for the global economy."

Nasser said global oil inventories are now at a five-year low and warned of “faster drawdowns" the longer the strait stays shut. Roughly 20% of the world’s daily oil supply normally flows through Hormuz. Aramco is currently not exporting any oil from the Gulf, instead rerouting crude through its East-West pipeline to the Red Sea port of Yanbu, which is expected to hit full capacity of 7 million barrels per day within days, Reuters noted. The crisis has already hit aviation, agriculture and the automotive sector, he added.

Qatar Warns of $150 Oil and Economic Collapse

Qatar’s energy minister and QatarEnergy CEO Saad al-Kaabi delivered one of the bluntest warnings yet. Speaking to the Financial Times, he said: “This will bring down the economies of the world. If this war continues for a few weeks, GDP growth around the world will be impacted. Everybody’s energy price is going to go higher."

Al-Kaabi forecast oil could hit $150 a barrel within two to three weeks and that gas prices could reach $40 per million British thermal units, nearly four times pre-war levels, the FT reported. On proposals to escort ships through the strait, he was direct: “The way that we are seeing the attacks, bringing ships into the strait… it’s too dangerous. It’s too close to the shore to bring ships in," he told the FT.

QatarEnergy declared force majeure after an Iranian drone attack struck the Ras Laffan LNG export facility, the world’s largest of its kind, forcing it to shut for the first time in its three decades of operation. Qatar accounts for around 19% of global LNG supply, per Fortune.

Kuwait and Bahrain Follow with Force Majeure

Kuwait Petroleum Corporation announced it had implemented “a precautionary reduction in crude oil production and refining throughput" due to “Iranian threats against safe passage of ships through the Strait of Hormuz." Kuwait is OPEC’s fifth-largest producer at around 2.6 million barrels per day, CNBC reported.

Bloomberg reported the cut began at roughly 100,000 barrels per day and was expected to nearly triple, with further reductions tied to storage levels. KPC formally declared force majeure on all oil and refinery product sales, per Bloomberg.

In Bahrain, state energy company Bapco Energies declared force majeure on Monday after an Iranian strike set the Al-Ma’ameer refinery ablaze, the country’s only oil processing facility. Euronews reported the company as saying its “group operations have been affected by the ongoing regional conflict in the Middle East and the recent attack on its refinery complex." Bapco said all domestic supply remains secured.

UAE Manages Offshore Output

Abu Dhabi Oil Company (ADNOC) said it is “managing offshore production levels to address storage requirements," while onshore operations continue normally, Bloomberg reported. The UAE, OPEC’s third-largest producer, is routing exports through its Fujairah pipeline, which bypasses the Strait of Hormuz entirely.

ExxonMobil: Strait Will Stay Shut ‘Harder for Longer’

ExxonMobil chief economist Tyler Goodspeed challenged the market’s more optimistic read of the crisis. Speaking to CNBC’s Squawk Box Europe, Goodspeed said: “When I think of the probability distribution of possible outcomes here, it seems to me there are many more scenarios, and more probable scenarios, in which the strait remains effectively closed harder for longer than there are scenarios in which normal traffic resumes."

Brent crude hit nearly $120 a barrel earlier this week before easing to around $92 on Tuesday. JPMorgan estimates production cuts could exceed 4 million barrels per day by end of next week if the Strait of Hormuz remains closed, CNBC noted. The Gulf Arab states will exhaust storage capacity and be forced into full production shutdowns if the conflict lasts more than three weeks, the bank warned.

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