Warnings of “catastrophic consequences” for international oil markets if the war with Iran continues to disrupt shipping in the Sea of Hormuz, Aramco, the world’s largest oil exporter, sent Aramco.

Oil shipments through this critical sea route have been largely blocked, and under normal circumstances about 20% of the world’s oil passes through this point every day.

In normal times, approximately 20% of the oil is transported through the oil tanker’s oil fields.

The Revolutionary Guards said on Tuesday that they would not allow “a single liter of oil” to leave the Middle East if attacks by the United States and Israel continue.

“There will be devastating consequences for global oil markets and the longer the disruption lasts… the more drastic the impact on the global economy,” Aramco CEO Amin Nasser told reporters during a conference call on the company’s financial results.

“Although we have faced disruptions in the past, this is by far the biggest crisis the region’s oil and gas industry has faced,” he added.

Impact on multiple industries

He said the crisis has not only affected the shipping and insurance industries, but is likely to have a chain effect on aviation, agriculture, the automotive industry and many other sectors of the economy.

The international benchmark for Brent crude oil, which surged to a more than three-year high on Monday, reaching nearly $120 a barrel, was trading near $92 on Tuesday after Donald Trump said the war could end soon.

However, Trump warned that the United States would smack Iran “much harder”if it attempts to block exports from the vital energy region.

At the same time, he said the U.S. Navy could escort merchant ships in the Persian Gulf to ensure their safe passage.

It remains unclear, however, whether the US Navy has the capacity to cover such large-scale missions, as some of its ships are already involved in attacks against Iran and intercepting Iranian missiles.

Asked about the possibility of the US Navy escorting tankers and whether this could be implemented on the required scale, Nasser noted that these are huge transport volumes and stressed that Aramco’s customers take the risk of delivery.

“Of course, we would support any action or measure that would help deliver our products to customers and the global market,” he said.

Another senior Gulf energy industry official, however, appeared skeptical of this scenario, noting that the only real solution to reopen the strait for oil and gas exports is to end the war.

Global reserves at low levels

Nasser also pointed out that global oil reserves are at their lowest level in five years and warned that the crisis will lead to a faster decline, underlining how critical it is to restart navigation in the Strait of Hormuz.

“Unfortunately for international markets, most of the excess capacity is in this region,” the Aramco chief said in a conference call with analysts, adding that rising demand over the year will keep the market in marginal balance.

At present Aramco is not exporting oil from the Persian Gulf as ships cannot load cargoes in the region. However, the company, which does not disclose its exact production levels, is meeting most of its customers’ needs, in part by tapping global reserves.

“This stock cannot be used for a long time, but for now we are utilizing it,” he said.

Major loss of supply from the market

According to Nasser, even with the possibility of exports through Saudi Arabia’s western region, the disruptions could remove about 350 million barrels from the market.

In addition to the pipeline, Aramco may also direct some production to domestic demand. About 2 million barrels per day of the pipeline’s total capacity of 7 million barrels is directed to western domestic refineries, which are net exporters of petroleum products.

Nasser also said that a small fire caused by an attack last week at Aramco’s Ras Tanura refinery, the largest in the country, was quickly extinguished and brought under control, while the refinery is already in the process of restarting.

Aramco said on Tuesday that its annual profit fell 12%, mainly due to lower crude oil prices.

It also announced that it would proceed with a share buyback of up to $3 billion, in the first such move in the company’s history.