Saudi Aramco reported a 25% increase in first-quarter net profit, underscoring the company’s ability to adapt to disruptions in maritime routes through the Strait of Hormuz. The state-controlled oil giant said net income for the three months ended March 31 reached $32.5 billion, exceeding an LSEG consensus estimate of $30.95 billion.
Total revenue for the quarter rose by nearly 7% year-on-year to $115.49 billion, driven by a combination of higher oil prices and increased sales volumes across crude, refined products and chemicals. The company said adjustments to its supply routing played a central role in maintaining flows to customers after shipping via Hormuz was restricted.
Pipeline response to shipping disruption
Aramco said it maximized throughput on the Riyadh-to-Red Sea East-West pipeline to compensate for the effects of Iran’s blockade of shipping through the Hormuz waterway amid the U.S.-Israeli conflict. The operator reported the pipeline reached its full capacity of 7.0 million barrels per day, providing a critical alternative route to keep crude moving to international markets.
Company chief executive Amin Nasser described the East-West line as a "critical supply artery, helping to mitigate the impact of a global energy shock," and emphasized the importance of reliable energy deliveries. The pipeline can direct about 2 million barrels per day to refineries on Saudi Arabia’s west coast while making approximately 5 million barrels per day available for export. During the conflict, Saudi Arabia reduced its output by 2 million barrels per day after the blockade curtailed shipments through Hormuz. The pipeline predominantly carries Arab Light and some Arab Extra Light; heavier grades have been curtailed.
Adjusted profit, capital spending and cash flow
On an adjusted basis, which excludes $1.06 billion of non-operational accounting items, Aramco’s quarterly net profit was $33.6 billion. That figure topped a company-provided median analyst estimate of $31.16 billion. Capital expenditure in the quarter eased to $12.1 billion from $12.5 billion a year earlier, and was down from $13.4 billion in the fourth quarter. The company has previously outlined a full-year capital expenditure range of $50-55 billion.
Free cash flow fell to $18.6 billion from $19.2 billion a year earlier. Management attributed the decline in part to a $15.8 billion increase in working capital during the period. Gearing, a measure of debt relative to equity, rose to 4.8% at March 31 from 3.8% at the end of 2025.
Dividends and ownership
Aramco declared a first-quarter base dividend of $21.9 billion, up 3.5% year-on-year, payable in the second quarter. That payout aligns with previously disclosed expectations for total dividends of $87.6 billion for 2026. The company also maintains a performance-linked dividend mechanism introduced in 2023 that ties payouts to free cash flow.
The Saudi state depends heavily on Aramco’s dividends to finance domestic spending and narrow budget gaps. The government directly owns almost 81.5% of the company, while the Public Investment Fund holds 16%.
Implications and company position
During a quarter marked by constrained shipping through a critical chokepoint, Aramco relied on its cross-country pipeline to maintain exports and domestic refinery supply. While adjusted profits outperformed market medians and revenue grew, the company recorded a small decline in free cash flow and a modest rise in gearing, reflecting changes in working capital and balance sheet dynamics during the period.
The results highlight how operational flexibility in logistics and sustained commodity pricing can support earnings even as broader geopolitical tensions disrupt conventional shipping routes. The company’s declared dividend increase reaffirms the role of Aramco’s cash generation in supporting state finances.