Saudi Aramco profits soar in second quarter as Iran war squeezes oil supply

Saudi Aramco on Tuesday reported a jump in second-quarter profit, following a period of severe disruption through the Strait of Hormuz amid the sprawling Middle East conflict.

The world’s largest oil company posted adjusted net income of 125.2 billion Saudi riyal ($33.4 billion) over the April to June period, beating analyst expectations of $31.59 billion.

The results come as oil supermajors have reported blowout quarterly profits, benefitting from higher fossil fuel prices amid hostilities between the U.S. and Iran.

The more than five-month-old conflict, which was already expanding beyond its main fronts, has embroiled further countries in the Middle East in recent days, notably the likes of Iraq and Egypt.

Aramco has responded to the Iran war by leveraging its 1,200-kilometer (746 miles) East-West pipeline to the Red Sea, bypassing the Strait of Hormuz, to maintain exports at a maximum capacity of 7 million barrels per day.

Key highlights from Q2:

• Cash flow from operating activities came in at $25.4 billion in the second quarter.
• Gearing ratio of 6.2% at the end of June, compared to 4.8% at the end of the first quarter.
• Aramco said it continues to utilize its East-West pipeline to increase supply flexibility.

“Despite the unprecedented supply disruption through the Strait of Hormuz, we continued to demonstrate our ability to maintain business continuity by capitalizing on our diverse asset base and multi-decade planning, including strategic infrastructure such as the East-West Pipeline, storage capacity, and export terminals,” Aramco President and CEO Amin H. Nasser said in a statement.

“That enabled us to sustain production and exports while advancing key projects, despite the challenging regional environment,” he added.

Aramco’s board said a second-quarter base dividend of $21.9 billion would be paid over the next three months.

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