SOCAR Trading: Global oil market under pressure from Strait of Hormuz crisis

The global oil market is under the influence of the crisis in the Strait of Hormuz, Taghi Taghizada, Director of Commercial Affairs at SOCAR Trading, a subsidiary of the State Oil Company of Azerbaijan (SOCAR), said during the 2nd Caspian and Central Asia Oil Trading and Logistics Forum in Baku, Report informs.

Taghizada noted that the world has been going through a complex period over the past six years:

"Events in Saudi Arabia, followed by the COVID-19 pandemic and the Russia-Ukraine conflict, have had a serious impact on the global economy. Now the world is facing a war situation in the Strait of Hormuz, the most critical point for global oil supply. The closure of the strait has long been discussed in textbooks and research as the most extreme scenario. We are now entering the second month of this scenario becoming reality."

The director added that there is currently a shortage of around 13–15 million barrels per day of oil supply from the Gulf region: "However, countries such as Saudi Arabia and the United Arab Emirates have found ways to cope through alternative pipelines and land routes."

He stressed that despite progress toward a green future, the world remains heavily dependent on traditional energy sources for economic growth and technological innovation.

"This situation is causing serious impacts and volatility across markets and the global economy. While some traders and economies may benefit from these developments, the main goal is to resolve the current tensions. All of us, both inside and outside this hall, want the situation in the Middle East to be resolved quickly and stability restored," Taghizada said.

The official underlined that easing tensions in the short term would allow traders, as well as national and major oil companies, to operate more stably: "This would also make it easier for companies to function in today's globalized but disrupted world."