The US-Israeli war on Iran has caused an “unprecedented” shock to global energy markets, removing some 3 billion barrels of oil supply, Saudi Aramco CEO Amin Nasser has warned.
The war launched in February effectively shut the Strait of Hormuz, a crucial oil and LNG artery, sending crude prices up roughly 50%. Despite Gulf exports recovering to a reported 80% of pre-war levels, renewed attacks on vessels have kept markets on edge, with Brent hitting a five-month high above $112 this week. Houthi attacks on Saudi energy infrastructure and shipping have compounded the crisis, threatening another vital trade chokepoint, the Red Sea’s Bab el-Mandeb Strait.
In an interview with Al Arabiya Business aired on Thursday, Nasser said the nearly eight-month crisis had deprived global markets of an estimated 3 billion barrels of oil.
“The impact of this crisis on energy markets is unprecedented,” he said. “We have lost around 3 billion barrels since it began. And bear in mind that the Gulf accounts for roughly 20% of global oil demand.”
The figure is equivalent to nearly a month of global oil consumption and reflects cumulative supply losses caused by disrupted shipping, reduced production and logistical bottlenecks.
With global oil inventories already below their five-year average when the war erupted, prices could have soared past $200 a barrel, Nasser warned. He credited emergency reserve releases, China’s sharp cut in seaborne oil imports and Saudi Aramco’s East-West pipeline, which bypasses Hormuz, with averting an even more severe price shock.
Nasser warned, however, that even an end to the crisis could bring fresh pressure on oil markets, as recovering consumption and a rush to replenish depleted reserves will likely fuel another demand surge.
“Once things return to normal, we expect additional demand of around 3 million barrels per day – about 2 million from consumption growth and another 1 million just to replenish the reserves countries have drawn down during the crisis,” he said, noting that the added demand could keep markets under strain long after shipping routes reopen.
Fresh escalation fears
Meanwhile, fears of another escalation are growing as US-Iran talks remain deadlocked. Reports on Wednesday claimed Washington was quietly pulling troops from bases in Jordan, Qatar and Kuwait, evacuating some diplomats and their families from Saudi Arabia and preparing similar withdrawals elsewhere. Similar precautions were taken ahead of the US-Israeli strikes on Iran on February 28.
The moves follow US President Donald Trump’s rejection last month of Tehran’s proposal to reopen Hormuz in exchange for lifting the US blockade of Iranian ports, easing oil export restrictions, unfreezing Iranian assets and ending regional hostilities, including Israeli operations in Gaza and Lebanon.
Washington and Israel have since reportedly discussed another major offensive, potentially soon after the November 3 US midterms. Israeli Prime Minister Benjamin Netanyahu has also openly threatened fresh strikes on Iran, even without US backing.
Part I traced a system built on the advice of four economists; even know their theories are not theology. The next half-century is a case study in what happens when that advice – however flawed – is abandoned, and in what happens to the few countries that never got the memo. Part II: Dismantling the […]
Earlier this month, Aramco’s chief executive, Amin Nasser, assured the markets that “our system is intact” and that Saudi Arabia could restore its full 12 million barrels a day of capacity within days. It is a comforting message, and Washington, European capitals and oil traders have every reason to want to believe it. It is not true.
Karl Miller has just completed a 37-slide operating assessment of Saudi Arabia’s energy system, covering everything from the oil fields to the fuel depots, as of October 20. I have read it closely. It is the most careful accounting of this damage I have seen, and it is careful in a way that should worry anyone counting on Saudi oil this winter. Miller does not count Houthi boasts, social-media videos or plumes of smoke as damage. He separates confirmed hits from claims, and he refuses to add up the design capacity of every facility that was struck as if it were all offline at once. Even with all of that discipline, the picture is grim.
A quarter of Saudi production is gone
Start with the headline number. In February, before the war, Saudi Arabia produced about 10.88 million barrels of crude a day. In September it was still producing 2.51 million barrels a day less, a drop of 23 percent. In August the shortfall was 4.64 million barrels a day, when output sank to about 6.24 million. From March through September, the Kingdom produced more than 800 million fewer barrels than it would have at its February rate. That is roughly eight days of total world oil consumption that never came out of the ground.
Aramco’s own books say the same thing. In the company’s reported figures, its liquids production fell from 10.56 million barrels a day in the first quarter to 7.57 million in the second, a 28 percent collapse in a single quarter. Natural gas and ethane fell nearly 6 percent. A company whose system was intact does not report numbers like that.
Exports followed production down. In one consistent tracking series, Saudi crude exports fell from 7.27 million barrels a day in February to 3.70 million in August, a 49 percent drop. They recovered to 5.62 million in September, but that is still 23 percent below the pre-war level.
The damage runs through the whole chain
The reason the recovery keeps stalling is that the damage is not in one place. It runs from the wellhead to the gas station.
At the front end, the Abqaiq complex, the plant that conditions most of Saudi Arabia’s light crude before it can be shipped or refined, sustained physical damage in July. In March, some 2 to 2.5 million barrels a day were curtailed across the offshore Safaniya, Marjan, Zuluf and Abu Safa fields. In April, Khurais and Manifa each lost 300,000 barrels a day.
In the middle, five of the Kingdom’s major refineries have been damaged or shut down. Ras Tanura, at 550,000 barrels a day the largest domestic refinery, burned and was shut in March. SATORP in Jubail lost three units in April, restarted at half capacity and was still running at only about 70 percent in May. SAMREF in Yanbu was hit in March. The Riyadh refinery caught fire on October 3. Jazan, a 400,000-barrel-a-day plant designed to turn out 250,000 barrels a day of ultra-low-sulfur diesel, shut down on July 27 after its power plant and tank farm were hit, and Ansar Allah attacks in August and September disrupted every attempt to restart it. Satellite imagery now shows tank damage at Petro Rabigh as well. The Juaymah gas-liquids plant, which feeds Saudi Arabia’s LPG exports, has suffered fires.
At the back end, the system for storing and moving fuel is being picked apart. Imagery of the Abha bulk plant from September 13 shows six tanks apparently destroyed and eight more damaged. A depot near Riyadh’s airport burned on September 19. Jazan’s tank clusters have been hit repeatedly.
And the East-West Pipeline, Saudi Arabia’s only way to move crude to the Red Sea and around a closed Strait of Hormuz, has been hit again and again. In April, 700,000 barrels a day of pumping capacity was knocked out. In September, repeated attacks took out three pumping stations and halted the line until a low-rate restart on September 22. On October 4 and 5, another pumping station near Khurais was reported badly damaged. The energy minister now says the line is running at 5.8 million barrels a day, against a rated 7 million. Even Miller notes that no one outside Aramco is metering the actual flow.
Why repairs don’t stick
Miller’s most important insight is that this is a system, and systems fail at their weakest link. Jazan is the clearest example. Fixing the crude units does no good if the gasification and power plant that run the refinery is still damaged, and fixing the power plant does no good if there are no tanks to put the diesel in. A refinery can be “restarted” on paper and still produce nothing useful. The same logic runs upstream. An oil field with every well intact still has to shut in if the processing plant or pumping station downstream of it is broken.
Every time Aramco gets one link repaired, another one gets hit. That is why restart announcements keep failing to show up in the production numbers.
Saudi Arabia is running out of fuel to sell
The most alarming numbers in Miller’s report are about refined products. By July, the latest month with complete data, Saudi refinery output was down 534,000 barrels a day from February, nearly 18 percent. Diesel output fell 21 percent. Diesel exports fell 47 percent, from 848,000 barrels a day to 446,000. Gasoline exports fell 40 percent.
The Saudis have been covering the gap by draining their tanks. Diesel stocks fell from 25.6 million barrels in February to 16.6 million in July, down 35 percent. Gasoline stocks fell by the same proportion. The world’s largest oil exporter more than doubled its imports of fuel oil, and it is burning more than twice as much crude directly in its power plants as it did in February. Some of that is the summer air-conditioning load, but it is not the behavior of a country with fuel to spare.
Lower stocks mean less cushion for the next attack. And there will be a next attack.
The trap Riyadh is in
Miller’s report spells out one more danger that I have not seen discussed anywhere else. If Saudi Arabia’s export outlets close, its oil has nowhere to go but its own refineries, its own power plants and its storage tanks. In July, domestic refineries and direct burning absorbed about 3.04 million barrels a day. Once the storage is full, that is roughly the ceiling on what Saudi Arabia could keep producing. Close Ras Tanura and Yanbu at the same time, and the Kingdom would have to shut in most of its oil fields. That is exactly the scenario Ansar Allah’s campaign against the pipeline, the Red Sea and the Gulf terminals is built to produce.
Why this matters to everyone else
The rest of the world is already living with the consequences. Saudi diesel exports are down by about 400,000 barrels a day, at the same moment Hormuz is restricted and Russian refineries are under drone attack. The International Energy Agency says the global diesel shortage will last well into 2027. Brent is above $100. Europe, which depends on imported diesel, is already rioting over the cost of living, and winter has not started.
Miller makes no claim that every barrel of lost output was blown up by a Houthi missile, and he is careful to say so. Some of the decline reflects shipping, security and commercial decisions. But the point is that it doesn’t matter to a trucker in Lyon or a farmer in Lombardy whether a barrel was lost to a missile, a closed sea lane or a refinery that has no power. It is gone either way.
So when Aramco says its system is intact, ask what the production figures, the export figures and the fuel stocks say. They say Saudi Arabia is producing a quarter less oil than it did in February, exporting half as much diesel, and drawing down its reserves to keep the lights on. Any new American or Israeli campaign against Iran will land on a Saudi energy system that has no slack left to absorb it.
The gender pay gap for full-time employees has continued to decline in the UK. It was 6.8% in April 2026, down from 7.2% in April 2025. This compares with 9.4% a decade ago and 16.4% 25 years ago.
Secondly, I asked Healey whether he sees the banks as making excessive profits, which would be the coherent justification for him to increase the surcharge on bank profits – as he is expected to do in the Budget next week.
He said: “You know the banks are the engine of investment in this country. The banks are doing well at the moment and that is good to see.
French borrowing costs continued to rise on Thursday, as investors fret that France’s government is struggling to pass a federal budget after public protests gripped the country.
France’s bond market was hit with another bout of selling, with the difference between French and German 10-year borrowing costs – a metric for the risk premium attached to French debt – rising to its highest level in almost 15 years.
French borrowing costs continued to rise on Thursday, as investors fret that France’s government is struggling to pass a federal budget after public protests gripped the country.
France’s bond market was hit with another bout of selling, with the difference between French and German 10-year borrowing costs – a metric for the risk premium attached to French debt – rising to its highest level in almost 15 years.
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