Saudi Arabia's state-backed oil company has said it will restore more than 70% of its oil shipments within days by rerouting supplies away from the Strait of Hormuz.
Amin Nasser, chief executive of Saudi Aramco, said the oil giant plans to divert around five million barrels per day through its East-West pipeline to the Red Sea, with tankers repositioning to load at the port of Yanbu.
Saudi Aramco typically exports around seven million barrels of oil per day through the Strait of Hormuz, a key global shipping route through which roughly 20% of the world's oil supplies passes.
Analysts have warned that storage limits and shipping constraints at Yanbu could restrict how much crude can be rerouted through the alternative route, The Times reports.
Amin Nasser said disruption due to the ongoing conflict in Iran has already unsettled shipping and insurance sectors which could have wider consequences for aviation, agriculture and carmaking industries.
He added that global oil inventories are currently at a five-year low and warned the crisis could accelerate stock drawdowns if shipping through the strait does not resume soon.
“There would be catastrophic consequences for the world’s oil markets, and the longer the disruption goes on, the more drastic the consequences for the global economy,” he said.