Saudi Aramco first-quarter profit jumps 26%

Source Credit : Portfolio Prints

Saudi Aramco reported a 26% year-on-year surge in first-quarter profit on Sunday, beating analyst expectations as a key pipeline network enabled the company to bypass the heavily disrupted Strait of Hormuz.

Adjusted net income rose to $33.6 billion in the first quarter, up from $26.6 billion a year earlier, the Saudi energy giant said in a statement to CNBC. The result also marked a 34% increase from the $25.1 billion recorded in the previous quarter.

Analysts had forecast first-quarter adjusted net income of $31.2 billion, according to Aramco.

“Our East-West Pipeline, which has now reached its maximum capacity of 7 million barrels per day, has proven to be a critical supply artery during this period of severe market disruption,” Aramco CEO Amin Nasser said in a statement.

“The pipeline has helped mitigate the impact of the global energy shock while ensuring continued supplies to customers affected by shipping restrictions in the Strait of Hormuz,” he added.

Iran’s blockade of the Strait of Hormuz has already removed nearly one billion barrels of oil from global supply chains, with shortages worsening as the strategic waterway remains closed.

Oil prices edged higher on Friday after Iran launched another missile strike on the United Arab Emirates and the United States targeted two Iranian tankers accused of attempting to breach its naval blockade.

International benchmark Brent crude futures rose roughly 1% to settle at $101.29 a barrel, while U.S. West Texas Intermediate crude closed slightly higher at $95.42 a barrel.

Brent crude prices climbed 95% during the first quarter and are now up 67% for the year, underscoring the scale of the supply shock rippling through global energy markets.

Energy executives have increasingly warned that the conflict with Iran could permanently reshape global oil and gas flows. Over the past two weeks, CEOs across the energy sector have told investors that the war is exposing deep vulnerabilities in the world’s supply infrastructure.

“The disruption has demonstrated the fragility of the global energy system,” said Olivier Le Peuch, chief executive of SLB, during the company’s earnings call.

Aramco reported a gearing ratio of 4.8% at the end of the first quarter, reflecting a relatively strong balance sheet despite heightened geopolitical turmoil.

The company’s board also approved a base dividend of $21.9 billion for the quarter, representing a 3.5% increase from a year earlier.