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Aramco Shares Climb as War Disrupts Supply
8 Mar
Summary
- Saudi Aramco shares surged as the Iran conflict escalated.
- Global oil prices may rise due to supply disruptions.
- Key oil fields and refineries faced attacks over the weekend.
Saudi Aramco's stock saw a substantial increase, its most significant since May 2023, as the conflict involving Iran entered its second week. This escalating situation has caused disruptions in oil supply chains, potentially driving up prices as international markets prepare to resume trading.
Global benchmark Brent crude surpassed $90 a barrel last Friday, with further increases anticipated. The United Arab Emirates and Kuwait have begun reducing oil production. This is compounded by the near-closure of the critical Strait of Hormuz, a major global energy export route.
Analysts believe that higher oil prices could compensate for any decrease in Aramco's exports. The company may also be able to reroute a significant portion of its shipments to the Red Sea, managing the logistical challenges and available capacity. However, concerns exist regarding the extent of this redirection capability.
Over the weekend, several of Aramco's major fields, including Shaybah and Berri, experienced attacks, with some damage reported. The Ras Tanura refinery, Saudi Arabia's largest, also had to halt operations following a drone strike in its vicinity. These fields collectively represent a significant portion of daily oil production capacity.
