Saudi Aramco CEO warns that oil disruption could trigger a "domino effect" or lead to "disastrous" consequences.

As the tensions in the Middle East continue to escalate, Saudi Aramco CEO Amin Nasser warned that further disruption to global energy supplies could have "catastrophic" effects. Speaking to analysts and investors on Tuesday morning, Nasser emphasized the danger of the current situation, calling the conflict with Iran the "largest crisis ever faced by the oil and gas industry in the region." Nasser stated, "This disruption has not only caused serious chain reactions in shipping and insurance industries, but also severe domino effects in aviation, agriculture, automotive, and other industries. The longer the disruption lasts, the more catastrophic the consequences for the global oil market and the more severe the impact on the global economy." The Saudi Aramco CEO revealed that the company is increasing the amount of crude oil transported through the East-West pipeline. This pipeline, which stretches across Saudi Arabia and leads to the Red Sea, is one of the two main pipelines that bypass the Strait of Hormuz. Nasser stated that the pipeline has a capacity of up to 7 million barrels per day, and Saudi Aramco expects to reach full capacity "within a few days." Nasser said that if Saudi Aramco is forced to reduce production to the level of 7 million barrels per day that the East-West pipeline can accommodate, the company has the ability to "restore production to normal levels within a few days rather than weeks." This may be seen as a bullish signal for investors, as previous market predictions suggested that shutdowns or production cuts could take weeks or even months to recover. International benchmark Brent crude futures and U.S. WTI crude futures were trading around $87.60 and $90 per barrel on Tuesday. After opening above $100 on Sunday night following the U.S. attack on Iran, both crude futures briefly soared to nearly $119 before sharply falling on Monday as President Trump expressed belief that the conflict could soon end. However, Trump's comments alone are unlikely to resolve the serious physical bottleneck affecting the global energy market. The critical waterway of the Strait of Hormuz, accounting for 20% of global oil flow, remains closed to traffic. On Tuesday morning, the UAE announced that its Ruwais refinery, with a daily processing capacity of about 900,000 barrels, was temporarily shut down as a precautionary measure following an airstrike, exacerbating the wave of refinery shutdowns in the Middle East. Earlier this week, Bahrain had already closed its only Bapco energy refinery. In terms of oil field production, shutdowns in Saudi Arabia, Iraq, Kuwait, and the UAE have resulted in a daily loss of about 6.7 million barrels, equivalent to roughly 6% of global supply. Meanwhile, the Trump administration has hinted at the possibility of further escalation in the situation. U.S. Defense Secretary Mark Esper stated on Tuesday morning that it would be "the most intense day of airstrikes so far."