Saudi Arabia's state oil company, Saudi Aramco, reported a 26% surge in net profit to $33.6bn (£26.9bn) for the first quarter of the year, despite ongoing conflict in the Middle East that has effectively closed the Strait of Hormuz. Revenue rose nearly 7% year-on-year to $115.5bn, driven by higher oil prices and the company's ability to reroute exports via its east-west pipeline.
The east-west pipeline, which connects Aramco's eastern oil fields to the Red Sea port of Yanbu, reached its maximum capacity of 7 million barrels per day during the quarter. Chief executive Amin Nasser described the pipeline as a 'critical supply artery' that helped mitigate the impact of a global energy shock and provided relief to customers affected by shipping constraints in the strait.
The Strait of Hormuz, through which about a fifth of global oil and gas normally passes, has been effectively closed since late February following the outbreak of the US-Iran war. The disruption has pushed Brent crude prices to around $100 a barrel, roughly 40% higher than pre-conflict levels. Nasser warned that even if the strait reopened immediately, it would take months for oil markets to rebalance, and if disruptions persist beyond a few weeks, normalisation may not occur until 2027.
Aramco maintained its quarterly dividend at $21.9bn, a crucial payout for Saudi Arabia, which relies heavily on the company's dividends to fund domestic spending. The Saudi government directly owns more than 80% of Aramco, with the Public Investment Fund holding an additional 16%. The company employs over 76,000 people globally and remains one of the world's largest oil producers.
