Aramco Warns of ‘Catastrophic Consequences’ for Oil Markets Amid Iran Conflict

Saudi Aramco, the world’s leading oil exporter, issued a stark warning on Tuesday, March 10, 2026, stating that continued disruption to shipping in the Strait of Hormuz due to the ongoing US-Israeli war with Iran could have “catastrophic consequences” for global oil markets and the world economy. Reuters and The Guardian reported on the announcement.

Disruption to Global Oil Supply

Oil shipments from the Middle East have been largely blocked through the narrow waterway since US strikes on Iran 11 days prior, removing approximately 20 million barrels of oil from the global market each day. The Guardian reports that despite the warning, oil prices fell on Tuesday following comments from Donald Trump suggesting a potential end to the war “remarkably soon.”

Aramco’s Capacity and Concerns

Aramco CEO Amin Nasser indicated the company expects to supply around 70% of its usual crude output despite the blockage, but cautioned that continued disruption would have “drastic” consequences for the global economy. OilPrice.com highlighted Nasser’s statement on the 2025 earnings call, emphasizing the potential spillover effects on sectors like agriculture, aviation, and automotive.

Market Reaction and Oil Prices

Brent crude, the international benchmark, experienced a 14% decrease on Tuesday, trading at approximately $85 per barrel. While still elevated compared to the $72 per barrel price before the US-Israel attacks on Iran, it was down from a peak of $119 earlier in the week – the highest price since 2022, when Russia invaded Ukraine. The Guardian reported that markets on both sides of the Atlantic likewise saw a partial rally, with the FTSE 100 in London rising 1.6%, Germany’s DAX up 2.4%, and France’s CAC rising 1.8%.

Financial Performance and Dividend Policy

Aramco reported a 12% drop in annual profit, reaching $93.4 billion for 2025, falling short of the LSEG consensus estimate of $95.6 billion. Net profit for the fourth quarter tumbled 20.5% to nearly $17.8 billion due to higher operating costs, marking the 12th consecutive quarter of year-on-year profit decline. The Times of Israel detailed the company’s financial results.

Despite the decline, Aramco confirmed a base dividend of $21.1 billion for the fourth quarter and $219 million in performance-linked dividends. The company also announced a $3 billion share buyback program over the next 18 months, its first-ever buyback initiative.

Iran’s Stance and Potential Resolution

Iran’s Revolutionary Guards warned that “not a litre” of oil would be exported from the Middle East if US and Israeli attacks continued. OilPrice.com noted this warning came alongside President Trump’s suggestion that the war could end “very soon.”

Aramco’s Mitigation Efforts

Aramco has begun reducing oil production at two fields due to the disruption around the Strait of Hormuz. The company has some capacity to redirect exports to the Red Sea port of Yanbu via its east-west pipeline network, but this capacity represents only a fraction of the crude flows lost with the Strait of Hormuz closed. OilPrice.com provided details on Aramco’s mitigation strategies.