Saudi Aramco profits jump despite conflict in Middle East | Aramco
Saudi Arabia’s state oil company reported a 26% increase in profits in the first quarter as its east-west pipeline allowed it to move millions of barrels of oil from the Gulf despite conflicts in the Middle East.
Saudi Aramco’s profits reached $33.6bn (£26.9bn) in the first three months of the year, while revenue rose nearly 7% on the previous year to $115.5bn.
The increase in profits comes at a time when Aramco is struggling with attacks on its infrastructure and exports from Gulf ports have been halted.
Amin Nasser, the company’s president and chief executive, said: “Our east-west pipeline, with a maximum capacity of 7 million barrels of oil per day, has proven to be a critical supply artery, helping to cushion the impact of the global energy shock and providing assistance to customers affected by shipping restrictions in the Strait of Hormuz.”
The strait, through which approximately one-fifth of the world’s oil and natural gas supply normally passes, has actually been closed since late February, when the US-Iran war began. Aramco’s east-west pipeline allows oil to be transported from the east coast to the Red Sea port of Yanbu.
The disruption in the strait triggered a rise in global energy prices; international benchmark Brent crude is trading at around $100 a barrel, about 40% higher than before the conflict.
Nasser, who previously warned that the ongoing blockade of the Strait of Hormuz would be a “catastrophe” for global oil markets, said that even if the strait was reopened immediately, it would take months for the market to return to normal.
“If trade flows resume through the Strait of Hormuz immediately or today, it will take several months for the oil market to come back into balance,” he wrote in an emailed statement to Bloomberg. “But if trade and transport continue to be restricted for more than a few weeks from now, we anticipate supply disruption will continue and the market will only return to normal in 2027.”
His comments come as the United States awaits a response to Iran’s offer of an interim deal to end the conflict. Recently, there have been conflicts in and around the strait after Donald Trump interrupted a naval mission aiming to open the waterway.
Aramco said it would keep its quarterly dividend at $21.9 billion after increasing the payout by 3.5% at the end of last year.
Saudi Arabia relies heavily on Aramco’s dividends to fund domestic spending. The government directly owns more than 80 percent of the business, while state investor Public Investment Fund owns 16 percent.
Headquartered in Dhahran, Saudi Arabia, Aramco employs more than 76,000 people worldwide and is one of the world’s largest businesses and oil producers.
