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Saudi Aramco reported a 26% jump in first-quarter profits, helped by its east-west pipeline that enabled it to ship millions of barrels of oil out of the Gulf despite conflict-related disruptions in the Middle East.
Profits rose to $33.6bn (£26.9bn) in the first three months of the year, while revenue increased nearly 7% year-on-year to $115.5bn.
The profit boost came even as Aramco faced attacks on its infrastructure and a halt to exports through its Gulf ports.
Amin Nasser, the company’s president and chief executive, said the east-west pipeline reached maximum capacity of 7m barrels of oil per day and has acted as a “critical supply artery.” He added that it helped mitigate the impact of a global energy shock and provided relief to customers affected by shipping constraints in the strait of Hormuz.
Aramco’s east-west pipeline moves oil from the company’s east coast to the Red Sea port of Yanbu. Nasser said the pipeline’s performance has helped reduce the effect of disruptions in the region.
The strait of Hormuz, through which about a fifth of the world’s oil and gas supply normally passes, has effectively been closed since the start of the US-Iran war in late February.
Disruption in the strait has contributed to higher global energy prices. Brent crude, the international benchmark, was trading at about $100 a barrel—around 40% higher than before the conflict.
Nasser previously warned that a continued blockade of the strait would be a catastrophe for global oil markets. In an emailed statement to Bloomberg, he said it would take months for the oil market to rebalance even if the strait reopened immediately.
He wrote: “If trade flows resume immediately or today through the strait of Hormuz, it will take a few months for the oil market to rebalance.” He added that if shipping remains curtailed for more than a few weeks, the supply disruption could persist and the market may not normalise until 2027.
Aramco said it would maintain its quarterly dividend at $21.9bn, after increasing the payout by 3.5% at the end of last year.
Saudi Arabia relies heavily on Aramco’s dividends to fund domestic spending. The government directly owns more than 80% of the business, while the Public Investment Fund holds 16%.
Aramco, headquartered in Dhahran, Saudi Arabia, employs more than 76,000 people globally and is one of the largest businesses and oil producers in the world.
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