Key facts
- Saudi Aramco reported a 33% surge in Q2 profits to $33.4 billion, driven by higher oil prices.
- CEO Amin Nasser stated the US-Iran war has cost the global market 2.6 billion barrels of oil.
- Aramco's export capacity remained unaffected by Houthi disruptions due to its East-West Pipeline.
- The UAE and Iraq are developing pipelines to bypass the Strait of Hormuz.
- ExxonMobil and Chevron also reported significant earnings increases in Q2.
Saudi Aramco announced a 33% surge in its second-quarter adjusted net income, reaching $33.4 billion, primarily due to elevated oil prices fueled by the ongoing US-Iran conflict. The company's CEO, Amin Nasser, stated that the war has resulted in a global market loss of 2.6 billion barrels of oil, impacting inventories. Despite disruptions to shipping lanes, including threats from Houthi rebels, Aramco maintained significant export capacity by utilizing its East-West Pipeline, which connects its eastern oil fields to the Red Sea port of Yanbu.
Nasser highlighted the strategic importance of the East-West Pipeline in ensuring business continuity amidst the supply disruptions through the Strait of Hormuz. The conflict has led to significant price increases for crude oil, with Brent benchmark exceeding $100 per barrel in May and July. Several Gulf states, including Iraq, Kuwait, Bahrain, and Qatar, have had to curtail or cancel energy shipments.
The East-West pipeline's success has positioned it as a model for other Middle Eastern nations seeking to bypass the Strait of Hormuz. The UAE is constructing a second pipeline to Fujairah to double its export capacity by 2027, while Iraq has agreed to rehabilitate a pipeline with Syria to transport oil to the Mediterranean coast.
Other major energy companies, such as ExxonMobil and Chevron, also reported substantial earnings increases in the second quarter. U.S. President Donald Trump commented on these high profits, suggesting the companies should return some of it to the public and lower consumer prices. Brent crude prices saw a decline following Trump's remarks and indications from U.S. Treasury Secretary Scott Bessent that a deal to end the fighting and reopen the Strait of Hormuz was nearing.