Saudi Aramco: Even if the Strait of Hormuz reopens today, the market cannot quickly recover; if the closure drags on for several more weeks, the supply shock will extend into next year.

Saudi Aramco’s quarterly profit surged 26%, yet its CEO issued a warning: even if the Strait of Hormuz reopens immediately, it will take months for oil markets to normalize; should the blockade persist for several more weeks, supply disruptions could extend into 2027. On Sunday, Saudi Aramco released its Q1 2026 financial results, reporting an adjusted net profit of $33.6 billion—up 26% year-on-year and exceeding analysts’ expectations of $31.2 billion. CEO Amin Nasser attributed this strong performance to the full-capacity operation of the East-West Pipeline. In Q1, the pipeline reached its maximum throughput capacity of 7 million barrels per day, bypassing the Iranian-blockaded Strait of Hormuz and delivering crude oil to Red Sea export terminals. In his statement, Amin Nasser said: "Our East-West Pipeline has proven itself a critical supply artery—helping mitigate the impact of global energy shocks and supporting customers affected by shipping restrictions in the Strait of Hormuz." Amin Nasser further warned: "If trade and shipping disruptions last beyond several weeks, supply interruptions are expected to persist, and markets may not fully normalize until 2027." Tensions in the Strait continue; new attacks occur A ceasefire agreement officially took effect on April 8, yet friction persists into this weekend. According to CCTV, on the 10th local time, the UAE Ministry of Defense issued a statement saying that UAE air defense systems successfully detected and intercepted two drones launched from Iranian territory. The statement also noted that no casualties resulted from the incident. According to CCTV, Kuwait’s Armed Forces posted on social media on the 10th stating that several "hostile" drones had entered Kuwaiti airspace and had been "dealt with according to established procedures."

Global oil supply has decreased by approximately 1 billion barrels over two months, yet Saudi Aramco’s Q1 net profit rose by 26%. How should we interpret this?

Before the U.S.–Iran conflict, the promotional price of 92-octane gasoline at the same gas station was RMB 6.2 per liter, with average daily sales volume at 1,000 liters and daily sales revenue at RMB 6,200. After the U.S.–Iran conflict, the promotional price rose to RMB 7.9 per liter, average daily sales volume dropped to 800 liters, and daily sales revenue increased slightly to RMB 6,320. Aramco’s net profit is primarily derived from sales of oil and natural gas. According to publicly available information, Saudi Aramco’s average crude oil sales price in Q3 2025 was $70 per barrel. It reported Q3 2024 earnings: net income attributable to shareholders totaled $26.032 billion (in USD). For the same period in 2024, the figure stood at $32.942 billion, while the average crude oil sales price in Q3 2024 was $79 per barrel. By comparing Saudi Aramco’s Q3 2024 and Q3 2025 financial reports alongside average crude oil sales prices, certain anomalies become apparent. Now, to analyze the 26% net profit growth in Q1 2026, we must compare both Q1 2024 and Q1 2025 financial reports—and their respective average crude oil sales prices. Such comparison reveals the issue is not as simple as it first appears. From 2024 to 2025: average crude oil price fell from $83 to around $76 per barrel. Sales volume remained nearly flat, yet total revenue declined from $116.8 billion to $108.2 billion—a 7.4% drop. In theory, lower prices should boost sales volume—but volume did not rise significantly. This is mainly because the OPEC+ production-cut agreement severely constrained Saudi Arabia’s output ceiling, forcing it to maintain only its basic production-and-sales baseline—watching helplessly as both prices and profits slid. Why constrain Saudi Arabia? • Saudi Arabia is the largest oil producer within OPEC+, and the only member possessing substantial spare production capacity and storage capability—enabling flexible output adjustments. Therefore, when OPEC+ decides to cut production to stabilize oil prices, Saudi Arabia is typically required to shoulder the largest share of production cuts, serving as the "market stabilizer."

Aramco Posts 34.5% Rise in Third-Quarter Profit Despite Attacks

21 hours ago

Saudi Aramco reported a 34.5% surge in Q3 net profit to $36.25 billion, driven by higher oil prices that offset volume cuts caused by regional conflicts and attacks on its infrastructure.

reuters

2026-08-04

Saudi Aramco Q2 Net Profit Rises 33% to $33.4 Billion as Oil Prices Surge on US-Iran Tensions

2026-11-02

Aramco Profit Rises 9% as Refining, Oil Price Drive Earnings

2026-11-02

Aramco Posts 34.5% Rise in Third-Quarter Profit Despite Attacks

Aramco Posts 34.5% Rise in Third-Quarter Profit Despite Attacks

FAQ