Aramco CEO Warns of Crude Crisis as Hormuz Closure Threat Looms

The CEO of Saudi Aramco has cautioned that a sustained closure of the Strait of Hormuz—through which approximately 20 million barrels per day of crude oil flows—would trigger a global supply shock with immediate and severe consequences. The strait, a vital maritime chokepoint, currently handles roughly 20% of the world’s seaborne oil trade, with Saudi Arabia alone exporting over 7 million barrels daily through the route. A prolonged disruption could push crude prices above $150 per barrel, according to internal Aramco risk models. The warning follows increasing uncertainty over the effectiveness of U.S. Navy escort operations in the region. Despite the deployment of naval assets, Aramco’s leadership has expressed reservations about the reliability of these escorts, citing incidents of delayed response and vulnerability to asymmetric threats. As a result, the company is accelerating development of alternative logistics, including expanded pipeline capacity and regional storage hubs in the Red Sea and Persian Gulf, with plans to increase non-Hormuz export capacity by 1.5 million barrels per day by 2028. Market indicators reflect growing concern: the CL=F crude oil futures contract has risen 18% over the past month, while the ^VIX volatility index climbed to 32—its highest level since 2023—signaling heightened risk sentiment. These movements suggest traders are pricing in a significant risk premium for geopolitical instability in the Middle East. The implications extend beyond oil prices. Energy-intensive industries, shipping firms, and consumer markets globally are bracing for potential inflationary pressure. Refineries in Asia and Europe are reviewing contingency plans, and some have already begun stockpiling crude ahead of a possible supply crunch.