US and Israeli strikes against Iran have upended the global energy trade, with the Islamic Republic effectively shutting the vital Strait of Hormuz and choking off its neighbors’ supplies out of the Persian Gulf. Brent crude has jumped by more than 50%, and prices of fuels have spiked.
Saudi Arabia and the United Arab Emirates are the only two Gulf producers with significant export alternatives that circumvent the Hormuz chokepoint. Aramco has reached the maximum capacity of 7 million barrels a day on its pipeline running to the Red Sea coast, from where it is exporting close to 5 million barrels a day of crude, or about 70% of its prewar total shipments.
Aramco has shut most production of its Medium and Heavy crude grades and is instead focusing on selling its Light and Extra Light barrels from the port of Yanbu, Chief Executive Officer Amin Nasser said in a conference call March 10.
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