Global oil giant Saudi Aramco has warned that continued disruption of oil shipments through the Strait of Hormuz could have catastrophic consequences for global energy markets.
The warning comes just days before Kenya’s next fuel price review by the Energy and Petroleum Regulatory Authority scheduled for March 14, raising concerns over possible supply pressure and price adjustments.
Speaking on the situation, Aramco Chief Executive Amin Nasser said global crude inventories have already fallen to a five-year low, warning that prolonged disruptions could quickly drain available supplies.
“While we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced,” Nasser said.
The Strait of Hormuz remains one of the most critical energy transit routes in the world, normally handling about 20 percent of global oil shipments every day.
Oil exports from the Gulf have recently faced disruptions amid rising tensions involving Iran, with reports suggesting that continued attacks involving the United States and Israel could escalate into a broader blockade of the strategic shipping corridor.
The developments have triggered concern in Kenya, where the government has been monitoring the situation closely ahead of the next fuel pricing cycle.
Kenya depends heavily on fuel imports supplied through a government-to-government arrangement involving Saudi Aramco, Emirates National Oil Company, and Abu Dhabi National Oil Company.
Under the deal, the Gulf suppliers provide petrol, diesel, kerosene and jet fuel to Kenya under a 180-day credit plan, a system designed to ease pressure on the country’s foreign exchange reserves.
However, Aramco indicated that it is currently unable to export crude directly from the Gulf due to the disruptions, forcing the company to rely on global inventory to meet most customer demand.
Nasser cautioned that relying on global stockpiles could not be sustained for long if the disruptions persist.
In response to the developments, Energy and Petroleum Cabinet Secretary Opiyo Wandayi convened an emergency meeting with oil marketers and companies participating in the government-to-government fuel supply arrangement.
Speaking on March 10 during the official listing of Kenya Pipeline Company on the Nairobi Securities Exchange, Wandayi sought to reassure the public that the government was working to maintain stable fuel supplies.
He said the government was engaging oil-producing nations under the agreement while exploring contingency measures to guarantee continued fuel availability.
The situation remains under close watch as the country awaits the next fuel price announcement from the Energy and Petroleum Regulatory Authority.
