Global energy markets will rebalance in a few months only if crude and liquefied natural gas (LNG) shipments through the Strait of Hormuz resume immediately, Aramco CEO Amin Nasser said on Sunday.

Nasser warned that market disruption could extend into 2027 if shipping remains curtailed by more than a few weeks from today, Bloomberg News reported, citing an emailed statement from Aramco. He told Reuters separately that the global oil market lost about 1 billion barrels over the past two months due to shipping disruptions through the strait. 

The strait, where about one-fifth of the world's oil and LNG typically flows through the waterway, became a flashpoint after U.S. military operations against Iran started on February 28. Iran’s restrictions on tanker movements through the strait amid a broader Middle East conflict have caused what the International Energy Agency (IEA) described as the "largest disruption in history."  

Oil prices posted their largest-ever monthly gain in March in the wake of the oil supply shock, according to the IEA's April report. Brent crude, the global benchmark, closed higher at around $101 a barrel on Friday, though it recorded a weekly drop of about 8%. 

Nasser made his comments as the company released its first-quarter financial results. The world's largest oil exporter posted a net income of $32.5 billion for the quarter ended March 31, up from $26 billion in the same period last year. 

Saudi Taps East-West Pipeline

OPEC+ production in March fell 9.4 million barrels per day (mb/d) month-on-month to 42.4 mb/d, the IEA said. This disruption forced oil producers, such as Saudi Arabia, to look for alternative export routes to offset the global energy shock. 

Saudi Arabia redirected shipments through its 7 mb/d East-West Pipeline, which has reached its maximum capacity, according to Aramco. The pipeline has "proven itself to be a critical supply artery," Nasser said. 

It has helped "mitigate the impact of a global energy shock and provided relief to customers affected by shipping constraints in the strait," Nasser said. "Recent events have clearly demonstrated the vital contribution of oil and gas to energy security and the global economy, and are a stark reminder that reliable energy supply is critical."

The International Monetary Fund (IMF) warned in April that "downside risks dominate" the global economic outlook due to the energy disruption.  A longer conflict and worsening geopolitical fragmentation "could significantly weaken growth and destabilize financial markets," it said. 

"Global activity now faces a major test from the outbreak of war in the Middle East," the Washington-based IMF said. "Assuming that the conflict remains limited in duration and scope, global growth is projected to slow to 3.1% in 2026 and 3.2% in 2027."  

Peace Talks Remain Elusive

As Saudi Arabia cautioned about a slower rebalancing of oil markets, Washington and Tehran appeared no closer to ending hostilities. President Donald Trump wants Iran to reopen the strait to shipping traffic in exchange for the U.S. lifting its blockade of Iranian ports.  

The state-run Islamic Republic News Agency reported today that Tehran has responded to the U.S. proposal to end the 10-week conflict. It provided no specific details, including how a deal over the country’s nuclear program might be negotiated or how to ensure maritime security. 

Trump told reporters on Friday that Washington could revive the "Project Freedom" military operation. He threatened to go "a different route if everything doesn’t get signed up, buttoned up." 

He also posted a composite image on Truth Social, which shows “159 Iranian ships” in two contrasting panels. The first depicts vessels flying Iranian flags labeled “Obama/Biden.” In contrast, the second shows the same fleet destroyed and resting on the ocean floor under the word “Trump,” suggesting a comparison of presidential approaches to Iran.

Regional Hostilities Persist

Iranian officials have remained defiant. 

"We will never bow our heads before the enemy, and if talk of dialogue or negotiation arises, it does not mean surrender or retreat," Iranian President Masoud Pezeshkian said in a post on X. "Rather, the goal is to uphold the rights of the Iranian nation and to defend national interests with resolute strength." 

As the U.S. and Iran have failed to move peace talks forward, hostilities have persisted in the region. The United Arab Emirates announced today that its air defence systems successfully engaged two drones launched from Iran. Kuwait also said that it had intercepted several "hostile" drones in its airspace. 

Qatar's Ministry of Defense announced that a commercial cargo vessel in its territorial waters was targeted by a drone this morning. The incident resulted in a limited fire onboard the vessel, with no reported injuries, the ministry said in a statement on X.

Image: Shutterstock/Skorzewiak