There is 180 million barrels of disruption so far, says Saudi Aramco CEO

There is a significant amount of supply disruption to the marketAlmost 17% of total supply from the region goes through the Strait of Hormuz, so it is significantWe are bringing the East-West pipeline to full capacity in the next couple of daysWe can speed it up but the issue was re-routing some of the customersBut very soon we will be at full capacity for the pipelineThere is 180 million barrels of disruption so farWe are doing our best to meet the majority of our customers’ requirements under the different circumstancesSpare oil output capacity is mostly concentrated in this regionSo, shipping resuming in the Strait of Hormuz is absolutely criticalGlobal inventories are already at a five-year low, we will see faster drawdownsThere would be catastrophic consequences for the oil market the longer the disruption goes onAnd the more drastic the consequences will be for the global economy if soIt’s a clear enough warning and this will be one that will only echo louder as the days go by. That is if the situation in the Middle East continues to stay as it is in the coming weeks. For now, oil prices are coming off the boil at least. But as mentioned here, it is mostly a case of the goalposts being shifted.On Nasser’s remarks with regards to the East-West pipeline, just be reminded that this will only bring back roughly 7 million barrels per day. It’s a far cry from the roughly 20 million barrels per day disrupted by the de facto closure of the Strait of Hormuz.
This article was written by Justin Low at investinglive.com.

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