Higher oil prices boost Saudi Aramco Q1 profit 26%
Saudi Aramco announced a first-quarter profit that exceeded analysts’ expectations, driven by a surge in oil and refined fuel prices due to the ongoing conflict. Adjusted net income increased by 26 percent to nearly 126 billion riyals ($33.6 billion) in the quarter compared to the same period last year, as stated in a release on Sunday. That surpassed analysts’ profit expectations of 109 billion riyals. The earnings indicate a rise in oil prices in March — when the global benchmark Brent surged over 43 per cent — as Iran effectively shut down the Strait of Hormuz in response to US and Israeli attacks. Saudi Arabia, having been in the process of increasing exports prior to the onset of the war, swiftly altered the course of certain shipments to an alternative port on the Red Sea just days after the conflict began.
Oil prices have surged to four-year highs in recent weeks, remaining close to $100 a barrel as tensions surrounding the Strait of Hormuz exacerbate what the International Energy Agency has characterized as the largest supply disruption in history. Saudi Arabia, along with other Persian Gulf nations including the United Arab Emirates, Kuwait, and Iraq, has been compelled to reduce production due to assaults on fields and the saturation of storage facilities. According to a stock exchange filing, Aramco reported that it gained from increased prices of crude oil, refined fuels, and chemical products during the quarter. The volumes of crude sold were higher compared to a year ago; however, there was a decline on a quarter-on-quarter basis, it stated, without offering further details. The company is set to conduct an analyst call on Monday.
In a statement, Chief Executive Officer Amin Nasser reported that Saudi oil shipments via the East-West pipeline, which links the eastern oil fields to the western port of Yanbu, achieved a capacity of 7 million barrels per day during the quarter. By the end of March, crude exports had reached 5 million barrels a day, as reported by a source familiar with the matter, bringing the kingdom’s overseas shipments to approximately 70 percent of prewar levels. The pipeline “has proven itself to be a critical supply artery,” Nasser stated. The connection has been crucial in “helping to mitigate the impact of a global energy shock and providing relief to customers affected by shipping constraints in the Strait of Hormuz.”
Aramco’s trading unit is among the firms that have been dispatching some crude shipments through the Strait of Hormuz in recent days, utilizing ships that predominantly have their transponders turned off to evade detection, according to sources familiar with the situation. The company reported that it sold crude oil at $76.90 a barrel in the first quarter, in contrast to $64.10 in the quarter that ended on Dec. 31 and $76.30 a year prior.
