Saudi Aramco’s first-quarter profit surged 26%, with the CEO warning that the oil market will not restore supply-demand balance until next year

Saudi Aramco (Saudi Aramco) has released its Q1 2026 financial results. Its adjusted net profit came in at $33.6 billion, up 26% year-on-year and beating market expectations. The profit growth was mainly driven by higher international crude oil prices, as the company rerouted exports through its East-West pipeline to bypass the blockaded Strait of Hormuz (Strait of Hormuz). The conflict in the Middle East caused shipping in the area to come to a standstill, pushing Brent crude oil futures to break above $100 per barrel. Saudi Aramco CEO Amin Nasser assessed that if the blockade continues, the crude oil market may not restore supply-demand balance until 2027.

Saudi Aramco’s Q1 earnings beat expectations

Saudi Aramco’s adjusted net profit for Q1 2026 was $33.6 billion, ahead of the expected $31.2 billion, up 26% from the same period last year. The increase in earnings was mainly supported by an average realized crude oil selling price of $76.9 per barrel. The company announced it will maintain a quarterly dividend of $21.9 billion to support the domestic economy. However, Q1 free cash flow was $18.6 billion, lower than the dividend payout. At the same time, the gearing ratio, which measures debt levels, rose from 3.8% at the end of 2025 to 4.8%, reflecting its capital allocation while maintaining its dividend policy.

CEO Nasser warns the crude oil market may not restore supply-demand balance until next year

Due to the blockade of the Strait of Hormuz (Strait of Hormuz) by Iran, the global oil market faces a potential loss of nearly one billion barrels per day. Driven by this geopolitical conflict, the benchmark Brent crude oil futures climbed in Q1 and recently settled at $101 per barrel. Saudi Aramco CEO Amin Nasser said that even if shipping resumes immediately, the market would still need several months to rebalance; if the disruption persists for weeks, the impact of supply disruptions would be further prolonged, and the normalization of supply and demand in the global crude oil market may be delayed until 2027.

Saudi Aramco reroutes Red Sea exports via the East-West pipeline

Before the war broke out in late February, Saudi Arabia had been ramping up exports. Within days after the conflict erupted, it quickly diverted some cargo to alternative ports along the Red Sea coast. Saudi Aramco can route crude via the East-West pipeline; the pipeline has reached its maximum operating capacity of 7 million barrels per day, directing products to Yanbu port on the Red Sea to ease some of the pressure on global supply. Data tracked by Bloomberg shows that April’s export volumes were approaching 4 million barrels per day. International energy services firms said the crisis reflects the vulnerability of the global energy system, indicating that the energy industry needs more investment and long-term planning in infrastructure and supply-chain resilience.

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