The CEO of a major Saudi oil exporter said Tuesday the conflict in Iran could have “catastrophic consequences” for energy markets, as President Trump and Tehran officials engaged in a war of words over the Strait of Hormuz choke point.
Aramco CEO Amin Nasser told investors on an earnings call that oil disruptions from the Middle East fighting set off a “drastic domino effect” that impacts oil shipping and other industries.
“There will be catastrophic consequences for the world’s oil market. The longer the disruption goes on and the more drastic the consequences for the global economy,” Mr. Nasser said.
Mr. Trump is focused on stemming the economic fallout from his decision to join Israel in striking Iran over its nuclear ambitions, missile program and support for terror proxies in the region.
Gas prices have risen steadily over the past week, surpassing $3.50 in the national average compiled by the AAA motor club. That’s up from about $3 a week ago.
Higher pump prices threaten one of Mr. Trump’s favorite economic talking points before the midterm elections.
SEE ALSO: Iran war follows decades of the theocratic regime’s deadly global terrorism
The president late Monday threatened Iran with “death, fire and fury” if it did anything more to constrict oil shipments in the Strait of Hormuz, a major shipping artery.
“If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,” he posted on Truth Social.
Iran’s top security official, Ali Larijani, responded on social media, saying the Iranian people “do not fear your hollow threats.”
Oil prices surged to start the week before easing when Mr. Trump said the U.S. was ahead of schedule in achieving its war aims. He called the conflict a “short-term” issue, reversing a selloff on Wall Street and reducing oil prices to the mid-$80s late Monday.
Oil prices for West Texas Intermediate crude and Brent oil were trading closer to $90 per barrel on Tuesday, so major U.S. stock indexes toggled between negative and positive territory after the opening bell.
Even so, Aramco warned of dire consequences if the war continued.
“Global spare capacity is mostly concentrated in this region,” Mr. Nasser said, “so it is absolutely critical that shipping resumes in the Strait of Hormuz.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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