Aramco CEO: Disruption in Strait of Hormuz Created the Biggest Supply Shock in History

The news indicates that the disruption in the Strait of Hormuz has created the largest supply shock in history. This situation is expected to cause a significant contraction in oil supply, potentially driving prices higher. Technically, the RSI is at 48.5, in neutral territory, while the MACD is below the signal line but positive. The price is below the SMA20 but above the SMA50, and has risen over 3% in the last 24 hours. In the short term, the supply shock news could support prices, but I believe the upside may be limited due to technical resistance levels and the risk of potential news verification.

The disruption in the Strait of Hormuz has the potential to create a historic shock in oil supply, which could generate a short‑term bullish price pressure for major oil companies such as Exxon Mobil. Technically, the stock fell 5.3% at the last close, but its RSI sits at 47.5 in the neutral zone and the MACD line has begun to cross above the signal line, signalling a weak recovery. The close just above the 20‑day SMA (146.07) suggests that level could act as short‑term support. However, remaining below the 50‑day SMA (150.56) indicates that upside momentum may be limited. The supply‑shock concern raised by the news could lift oil prices and support XOM in the near term, but since the downtrend has not been fully broken, the upside expectation should be viewed with moderate confidence.

The Aramco CEO’s characterization of the Hurmuz Strait disruptions as the historical largest supply shock could push oil prices higher in the short term. CVX is currently trading above its 20‑day simple moving average (SMA20) but below its 50‑day SMA (SMA50), indicating a medium‑term downtrend. The MACD line is above its signal line, and the RSI hovers around 50, which may signal a short‑term rebound. A 4.7% decline over the past 24 hours has not yet pushed the asset into an oversold technical zone, suggesting a high probability of a post‑news recovery. Nonetheless, increased volatility and shifts in market sentiment remain risks to consider.

The Aramco CEO’s comments on disruptions in the Strait of Hormuz underscore the risk of a significant tightening in oil supply. This could lift oil prices in the short term and positively affect revenues for producers such as BP. However, current technical indicators—RSI 42.8, a negative MACD, and SMA20 below SMA50—signal a downtrend. Consequently, for the move to materialize as a clear upward rally, prices would need to recover in the near term.