Saudi Arabia’s state oil giant, Aramco, has reported a significant 26% rise in profits for the first quarter, reaching $33.6 billion. This impressive surge comes amid ongoing conflict in the Middle East, with the company’s east-west pipeline playing a pivotal role in maintaining oil shipments out of the Gulf region. Despite facing attacks on its infrastructure and a temporary halt to exports through Gulf ports, Aramco’s revenue climbed nearly 7% from the previous year, totaling $115.5 billion.
The east-west pipeline, which has reached its maximum capacity of 7 million barrels per day, has been crucial in mitigating the impact of global energy disruptions. Amin Nasser, Aramco’s president and CEO, highlighted the pipeline’s importance as a “critical supply artery,” particularly in light of shipping constraints in the Strait of Hormuz. This strategic route enables the company to transport oil from the east coast to the Red Sea port of Yanbu, providing essential relief to customers.
The ongoing closure of the Strait of Hormuz, a vital passage for approximately one-fifth of the world’s oil and gas supply, has triggered a spike in global energy prices. Brent crude, the international oil benchmark, is currently trading around $100 per barrel, marking a 40% increase since the conflict’s onset. Nasser, who previously warned of a “catastrophe” for global oil markets due to the blockade, noted that even if the strait were to reopen immediately, the market would take months to stabilize.
In an emailed statement, Nasser expressed concerns about prolonged disruptions, stating that if trade and shipping remain restricted beyond a few weeks, the supply issues could persist, delaying market normalization until 2027. Meanwhile, the US awaits Iran’s response to proposals for an interim deal aimed at ending the conflict, with recent skirmishes occurring in the region following mixed signals regarding a US naval mission to open the waterway.
Amid these challenges, Aramco has committed to maintaining its quarterly dividend at $21.9 billion, following a 3.5% increase in the payout at the end of last year. This decision underscores the company’s strong financial position despite the volatile geopolitical landscape and highlights the vital role of its infrastructure in securing energy supplies during turbulent times.