Saudi Aramco, the state-owned oil company of Saudi Arabia, has reported a significant 26% increase in its first-quarter profits, amounting to $33.6 billion. This rise in earnings is largely attributed to the strategic use of its east-west pipeline, which facilitated the shipment of millions of barrels of oil despite ongoing conflicts in the Middle East. The company’s revenue also saw an uptick, reaching $115.5 billion, which marks a nearly 7% improvement from the previous year.
Despite facing challenges such as attacks on its infrastructure and a temporary halt to exports via its Gulf ports, Aramco’s east-west pipeline proved crucial. Amin Nasser, Aramco’s president and CEO, emphasized the pipeline’s importance, stating it achieved its full capacity of 7 million barrels of oil per day. This pipeline has been instrumental in alleviating the global energy shock and supporting customers impacted by the blockage in the Strait of Hormuz, a vital passage for about 20% of the world’s oil and gas supply, which has been effectively closed since the US-Iran conflict commenced in late February.
The closure of the Strait of Hormuz has led to a surge in global energy prices, with Brent crude, the international oil benchmark, trading at approximately $100 per barrel, reflecting a 40% increase from pre-conflict levels. Nasser previously warned that the continued blockade would pose a severe threat to global oil markets. In a statement to Bloomberg, he noted that even if the strait reopened immediately, it would take several months for the oil market to stabilize. Should the disruption persist for more than a few weeks, he anticipates that the supply imbalance might only be resolved by 2027.
These developments come amid ongoing US-Iran negotiations, as the US awaits Iran’s response to proposals for an interim deal to resolve the conflict. The region has witnessed recent skirmishes around the strait, following former President Donald Trump’s announcement and subsequent pause of a naval operation aimed at reopening the waterway.
In financial terms, Aramco has decided to maintain its quarterly dividend at $21.9 billion, despite having increased the payout by 3.5% at the end of the previous year. This decision underscores the company’s commitment to rewarding its shareholders even amidst geopolitical tensions affecting global oil trade.