Saudi Arabia’s state oil giant, Aramco, has announced a significant 26% increase in its first-quarter profits, attributed to the strategic use of its east-west pipeline. This infrastructure has enabled the company to continue exporting millions of barrels of oil despite ongoing conflicts in the Middle East. Aramco’s profits soared to $33.6 billion in the first quarter, with revenue climbing nearly 7% from the previous year, reaching $115.5 billion.
Despite facing challenges such as attacks on its infrastructure and a suspension of exports through Gulf ports, Aramco has managed to sustain its operations effectively. Amin Nasser, the company’s president and CEO, emphasized the crucial role of the east-west pipeline, which reached its full capacity of 7 million barrels per day. “Our east-west pipeline has proven itself to be a critical supply artery,” Nasser remarked, noting its significance in alleviating the impact of global energy disruptions and easing constraints faced by customers due to shipping limitations in the Strait of Hormuz.
The strategic importance of the east-west pipeline has become even more pronounced as the Strait of Hormuz, a vital passage for about one-fifth of the world’s oil and gas supply, has been effectively closed since the onset of the US-Iran conflict in late February. This closure has led to a surge in global energy prices, with Brent crude, the international benchmark, trading around $100 a barrel—an increase of approximately 40% since before the conflict began. The pipeline enables Aramco to transport oil from its eastern facilities to the Red Sea port of Yanbu, circumventing the affected strait.
Nasser has previously expressed concern over the potential global oil market repercussions if the Strait of Hormuz remains blocked, describing it as a potential “catastrophe.” He noted that even if trade through the strait were to resume immediately, it would still take several months for the market to stabilize. In a statement, he warned that continued shipping disruptions could extend the supply imbalance, potentially delaying market normalization until 2027.
The US is currently awaiting Iran’s response to proposals for an interim agreement aimed at resolving the conflict. Meanwhile, recent skirmishes have occurred in the vicinity of the strait, following a temporary halt of a US-led naval mission intended to reopen the waterway. Amid these geopolitical tensions, Aramco has confirmed it will maintain its quarterly dividend at $21.9 billion, following a 3.5% increase in the payout at the end of the previous year.