Saudi Aramco Q1 Profit Rises 25% During Strait of Hormuz Oil Crisis

Saudi Aramco Profit Jumps 25% as Hormuz Crisis Pushes Oil Pipeline to Full Capacity

Saudi Arabia’s energy giant Saudi Aramco reported a strong increase in profit during the first quarter of 2026 as rising tensions in the Middle East continued to shake global oil markets. The company benefited from higher oil prices, strong export demand, and the full use of its East-West crude pipeline after shipping disruptions in the Strait of Hormuz created pressure across the global energy sector.

The latest financial results show how deeply the ongoing Iran, U.S., and Israel conflict is affecting the world economy. While many countries are struggling with supply shortages and rising energy costs, Saudi Aramco managed to maintain stable exports by shifting more crude oil through its East-West pipeline, avoiding the dangerous shipping route near the Strait of Hormuz.

According to the company, first-quarter net profit reached $32.5 billion for the period ending March 2026. The figure was significantly higher than analyst expectations of around $30.95 billion, showing the company’s ability to perform strongly even during one of the biggest oil supply disruptions in recent years. Adjusted net profit climbed to $33.6 billion after excluding non-operational accounting items, again beating market forecasts.

Aramco’s total revenue also increased strongly during the quarter. Company revenue rose nearly 7 percent year-on-year to $115.49 billion, supported by higher crude oil prices and stronger sales of refined products and chemicals. The sharp increase in energy prices followed Iran’s disruption of shipping activity through the Strait of Hormuz, a route that normally handles almost one-fifth of global oil supplies.

As tensions escalated in the Gulf region, Saudi Arabia increased its reliance on the East-West pipeline, one of the country’s most important energy assets. The pipeline connects oil fields in eastern Saudi Arabia to the Red Sea port city of Yanbu, allowing exports to continue without passing through the Strait of Hormuz.

Amin Nasser said the pipeline reached its full operational capacity of 7 million barrels per day during the crisis. Around 2 million barrels per day were used to supply refineries on Saudi Arabia’s west coast, while nearly 5 million barrels per day were directed toward exports. He described the pipeline as a “critical supply artery” that helped reduce the impact of the global energy shock.

The conflict also forced Saudi Arabia to reduce overall oil production by around 2 million barrels per day after Iran’s blockade disrupted regional shipping routes. Reports indicate that the pipeline mainly transported Arab Light and Arab Extra Light crude, while heavier grades faced limitations because of logistical challenges during the crisis.

Despite the difficult market conditions, Aramco continued rewarding shareholders with higher payouts. The company announced a first-quarter base dividend of $21.9 billion, representing a 3.5 percent increase compared to last year. The payment is expected to be distributed during the second quarter as part of the company’s planned total dividends of $87.6 billion for 2026.

Saudi Arabia depends heavily on Aramco’s profits to support government spending and major economic projects. The Saudi government directly owns around 81.5 percent of the company, while the Public Investment Fund controls another 16 percent stake. This means Aramco’s financial performance remains directly connected to the country’s broader economic stability and development plans.

Although profits rose sharply, the company’s free cash flow declined slightly. Free cash flow fell to $18.6 billion compared to $19.2 billion during the same period last year. Aramco said the decline was mainly linked to a large increase in working capital, which rose by $15.8 billion during the quarter. At the same time, the company’s gearing ratio, which measures debt compared to equity, increased from 3.8 percent at the end of 2025 to 4.8 percent by March 2026.

Aramco also slightly reduced its capital spending during the quarter. Capital expenditure stood at $12.1 billion compared to $12.5 billion a year earlier and $13.4 billion in the previous quarter. However, the company maintained its full-year investment target between $50 billion and $55 billion, signaling continued confidence in long-term global energy demand.

Amin Nasser warned that global oil markets may take significant time to recover even if shipping routes reopen soon. According to him, the world has lost nearly one billion barrels of oil supply over the past two months due to the conflict and shipping disruptions. He said reopening routes alone would not immediately stabilize markets because years of underinvestment had already weakened global oil inventories before the crisis began.

Nasser also stressed that Asia remains one of Aramco’s most important markets and will continue driving global oil demand in the future. He said the current crisis has shown that the global economy still depends heavily on reliable traditional energy supplies, especially during periods of geopolitical instability.

Aramco’s latest earnings report is more than just a strong financial result. It reflects a major shift happening in global energy politics as countries face growing uncertainty over supply security, trade routes, and rising geopolitical risks. The Strait of Hormuz crisis has once again demonstrated how quickly tensions in the Middle East can impact oil prices, global markets, and economic stability worldwide.