Saudi Aramco, the national oil giant of Saudi Arabia, has announced a significant rise in its profits for the first quarter, reporting a 26% increase despite ongoing regional tensions in the Middle East. The company attributed its success to the strategic use of its east-west pipeline, which enabled the movement of millions of barrels of oil away from the Gulf amid turmoil. Aramco’s profits soared to $33.6 billion, with revenues climbing nearly 7% from the previous year to reach $115.5 billion.
This financial boost comes against a backdrop of challenges, including attacks on Aramco’s infrastructure and a suspension of exports through its Gulf ports. Amin Nasser, president and CEO of Aramco, highlighted the importance of the east-west pipeline, which has been operating at its full capacity of 7 million barrels per day. The pipeline has played a crucial role in alleviating the effects of a global energy shock, offering a reliable supply route to customers impacted by shipping restrictions in the strait of Hormuz.
The strait of Hormuz, a critical choke point through which approximately 20% of the world’s oil and gas supply typically passes, has been effectively closed since late February due to the US-Iran conflict. The closure has led to an increase in global energy prices, with Brent crude, the international benchmark, reaching around $100 per barrel — a 40% increase since the conflict’s onset. Nasser previously warned that the prolonged closure of the strait could spell disaster for global oil markets.
In a statement to Bloomberg, Nasser expressed that even if the strait were to reopen immediately, it would take several months for the oil market to regain balance. He noted that if the disruption continues for more than a few weeks, the supply issues could persist, delaying market normalization until 2027. The US is currently awaiting a response from Iran regarding proposals for an interim agreement to end the hostilities, with recent skirmishes occurring around the strait following Donald Trump’s announcement and subsequent pause of a naval mission aimed at reopening the waterway.
Despite these challenges, Aramco has decided to maintain its quarterly dividend at $21.9 billion, following a 3.5% increase in payouts at the end of the previous year. This decision reflects the company’s confidence in its financial resilience and strategic positioning amid ongoing global market uncertainties.