The oil market will take until 2027 to normalize if the disruption in the Strait of Hormuz persists beyond the middle of June, the CEO of the world’s largest oil company warned Monday.
“If the Strait of Hormuz opens today, it will still take months for the market to rebalance, and if its opening is delayed by a few more weeks, then normalization will last into 2027,” Saudi Aramco CEO Amin Nasser told investors on the company’s first-quarter earnings call.
The U.S. and Iran do not appear any closer to a deal to end the war and reopen Hormuz. President Donald Trump said Monday the ceasefire with Tehran is on life support after he rejected its counterproposal to end the conflict.
About 20% of the world’s oil supplies passed through Hormuz before the war. Iran has managed to basically close the narrow sea lane, which connects the Persian Gulf to the global market, since early March.
The biggest challenge facing the market is the disruption to the global tanker fleet, Nasser said. More than 600 ships, mostly oil and product tankers, are currently stuck in the Gulf, he said.
