By Yousef Saba
Dubai — Saudi Aramco reported a 25% jump in first-quarter profit on Sunday, showing resilience as US-Iran war tensions curtail shipping through the Strait of Hormuz, with the state oil giant’s East-West crude pipeline running at full capacity to mitigate supply disruptions.
The world’s top oil exporter earned a net profit of $32.5bn in the three months ended March 31, beating an LSEG consensus estimate of $30.95bn.
Total revenue surged nearly 7% from a year earlier to $115.49bn due to higher prices and volumes sold of both crude oil and refined and chemical products.
Iran’s blockade of shipping through the crucial Hormuz waterway amid the US-Israeli conflict — which has curtailed energy supply and sent prices surging — prompted Aramco to ramp up crude flows from its east coast to the Red Sea port of Yanbu.
Supply artery
“Our East-West pipeline, which reached its maximum capacity of 7.0-million barrels of oil per day, has proven itself to be a critical supply artery, helping to mitigate the impact of a global energy shock,” Aramco CEO Amin Nasser said, adding that “reliable energy supply is critical”.
The pipeline can supply about 2-million bpd to refineries on Saudi Arabia’s west coast, leaving 5-million bpd for export.
During the war, Saudi Arabia cut output by 2-million bpd after Iran blockaded Hormuz, a waterway that carried a fifth of the world oil supply before the war. The line mainly carries Arab Light and some Arab Extra Light, with heavier grades curtailed.
Aramco’s adjusted quarterly net profit was $33.6bn, beating a company-provided median analyst estimate of $31.16bn. The figure strips out $1.06bn in non-operational accounting items.
Capital expenditure fell slightly to $12.1bn in the quarter from $12.5bn a year prior and was sharply down from $13.4bn in the fourth quarter. Aramco has outlined $50-55bn in capital expenditure this year.
Budget gaps
Aramco declared a first-quarter base dividend of $21.9bn, up 3.5% year-on-year and payable in the second quarter, in line with expected total dividends of $87.6bn for 2026.
It had also introduced a performance-linked dividend in 2023 linked to free cash flow.
The Saudi state relies heavily on Aramco’s payouts to fund domestic spending and cover budget gaps. The government directly owns almost 81.5% of the company, while the Public Investment Fund holds 16%.
Free cash flow slipped to $18.6bn from $19.2bn a year earlier, impacted by a $15.8bn rise in working capital. Aramco’s gearing — measuring debt relative to equity — rose to 4.8% at March 31 from 3.8% at the end of 2024.
