Saudi Aramco CEO: If the Strait of Hormuz resumes navigation, production capacity can fully recover within "a few days"

The situation in the Strait of Hormuz continues to keep the global energy markets on edge. Saudi Aramco CEO Amin Hassan Nasser stated on Tuesday that once the strait resumes navigation, the company can fully restore its capacity “within a few days,” but warned that if the strait remains closed for an extended period, it would cause “catastrophic consequences” for the global oil market and have a “serious impact” on the global economy.

Nasser made these remarks during the full-year 2025 investor earnings call. He pointed out that the majority of the world’s spare oil production capacity is located in the Middle East and must be exported through the strategic waterway of the Strait of Hormuz, making the smooth operation of this passage critical to global energy supply. Meanwhile, on Monday, Iran’s Foreign Ministry spokesperson warned in an interview with CNBC that oil tankers transiting the Strait of Hormuz “must be very careful,” further fueling market tensions.

When asked about the feasibility of U.S. Navy escort plans, Nasser responded cautiously, without showing clear confidence. He said, “We support any actions or measures that help deliver products to customers and to the global market.” This statement was interpreted by the market as ambiguous, making it difficult to boost confidence.

Alternative Export Routes Provide Buffer

Despite the tense situation, Nasser revealed a potential alternative that could somewhat ease supply pressures. Saudi Aramco currently produces about 7 million barrels of crude oil per day, and the company expects to reroute around 5 million barrels daily through east-west pipelines via the Red Sea port of Yanbu, bypassing the Strait of Hormuz.

Nasser stated that the company is close to being able to transfer most of its production to this pipeline. This alternative route is the only backup channel for Saudi Aramco to access export markets, and its importance is increasingly highlighted amid current geopolitical tensions.

However, the pipeline’s capacity still cannot fully cover Saudi Aramco’s entire daily output, meaning that if the strait remains blocked, the global supply gap will still be difficult to fully bridge.

Strong Demand Outlook, Rising Supply Disruption Risks

Nasser is optimistic about global oil demand in 2026. He forecasts that next year, global daily demand will increase by 1.1 million barrels, reaching a total of 107 million barrels. Against this backdrop, the strategic importance of the Strait of Hormuz as the world’s most critical energy transit chokepoint is further emphasized.

He stressed that most of the world’s spare capacity is concentrated in the Middle East and generally depends on this strategic waterway for exports, meaning that any sustained disruption in navigation would cause irreplaceable shocks to global supply and have a “serious impact” on the global economy.

Full-year results beat expectations, but stock performance lags behind the market

On the financial side, Saudi Aramco announced an adjusted full-year 2025 net profit of 392 billion riyals (approximately $105 billion), slightly above market expectations of 380 billion riyals. The company’s free cash flow for the year reached $85 billion, and it announced a $3 billion share buyback plan over the next 18 months, along with a 3.5% increase in Q4 dividends to nearly $22 billion.

Oil prices surged significantly, with Saudi Aramco’s stock price rising 12.6% so far this year, noticeably lagging behind the approximately 25% increase in U.S.-listed energy ETFs and about 50% rise in Brent crude oil. Analysts note that since most of Aramco’s profits are taxed by the Saudi government, its operational leverage from rising oil prices is relatively limited, weakening its appeal to fund managers, despite a dividend yield of about 4.85% providing some downside support for the stock.

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