Aramco Q1 Profit $32B, 1B Hormuz Barrels Lost

Saudi Aramco reported first-quarter 2026 net income of 120 billion riyals, or roughly $32 billion, a 25 percent year-on-year increase as the kingdom's national oil company leaned on the East-West Crude Oil Pipeline to keep barrels moving while the Strait of Hormuz remained largely closed by the U.S.-Iran conflict. Adjusted net income climbed 26 percent to $33.6 billion, beating analyst consensus of $31.16 billion. Total revenue reached 433.10 billion riyals against 405.65 billion riyals a year earlier. The company maintained a base dividend of $21.9 billion for the quarter, up 3.5 percent year on year.

WTI crude was trading near $98.20 per barrel on the CME in afternoon trading on May 11, 2026, while Brent for July delivery was trading around $103.77 per barrel on ICE after touching an intraday high of $108.80 earlier in the morning. The volatility was driven by President Donald Trump rejecting Iran's latest response to a U.S. peace proposal, prolonging the Hormuz closure that began on February 28.

Nasser Says 1 Billion Barrels Lost in Two Months Will Slow Recovery

In remarks accompanying the earnings release, chief executive Amin Nasser said the world has been deprived of approximately one billion barrels of oil over the past two months. "Reopening routes is not the same as normalizing a market that has been deprived of about one billion barrels of oil," Nasser said. The deficit works out to roughly 16.7 million barrels per day of disrupted flow when averaged across the 60-day stretch, against the U.S. Energy Information Administration's estimate that the Strait of Hormuz typically handles 21 million barrels per day of crude, condensate and refined products. That implies nearly 79 percent of normal Hormuz volumes have been knocked out of the seaborne market.

Nasser argued that years of underinvestment by international oil companies have compounded the strain on already-low global inventories, and the Aramco CEO emphasized Asia remains central to the company's strategy. The Q1 release notes the company maintained spare-capacity discipline through the quarter, with capital expenditure of $12.1 billion.

East-West Pipeline Held at 7 Million bpd Maximum Capacity

The 1,201-kilometre Petroline, formally the East-West Crude Oil Pipeline, ran at its full 7 million barrels per day capacity through the first quarter after Aramco converted accompanying natural gas liquids lines to carry crude. The line moves barrels from Abqaiq in the Eastern Province to terminals at Yanbu and Al Muajjiz on the Red Sea, bypassing Hormuz entirely. Roughly 2 million bpd of capacity feeds west coast refineries, leaving about 5 million bpd available for export through Yanbu, whose two terminals have a tested loading capacity near 4 million bpd. Saudi Arabia is currently exporting up to 2.47 million bpd via Yanbu.

The realized crude oil price averaged $76.9 per barrel for the January-to-March period, only marginally above the $76.30 per barrel realized in the comparable 2025 quarter. The earnings beat therefore reflected higher export volumes, working capital management, and disciplined upstream operating costs rather than headline crude price gains.

OPEC+ Continuity, Asia Demand and Aramco Capex Floor

The Q1 numbers landed days after seven OPEC+ producers approved a 188,000 barrel per day production increase for June at the first ministerial meeting held without United Arab Emirates participation. Aramco and Rosneft signaled production continuity during that meeting despite the Hormuz constraints, and Sunday's earnings release reinforces that Saudi Aramco intends to keep cash flow protected even as physical export options narrow.

JPMorgan analysts told clients in a May note that Brent is likely to remain in the low $100s per barrel until Hormuz transit normalizes, while Goldman Sachs has flagged downside risk if a peace deal triggers a release of stranded Iranian and Iraqi inventories. Aramco's leadership pushed back against a quick-rebound thesis. Nasser said reopening shipping routes will not by itself replace the missing barrels, signaling Aramco expects an extended price floor in the high-$90s even after the strait reopens.

Outlook for the Rest of 2026 and the Dividend Math

Aramco's adjusted net income of $33.6 billion in Q1 exceeded the prior-year quarter's $26.6 billion by $7 billion, with the pipeline reroute and resilient export volumes carrying most of the lift. The company expects to keep capital expenditure in the $50 to $55 billion range for full-year 2026, on the lower end of prior guidance, as cross-border conflict adds uncertainty to greenfield work. The base dividend remains the largest in the energy industry. The $21.9 billion Q1 payment annualizes near $87.6 billion if maintained at the same rate through year end, providing the Saudi state with a near-record cash transfer just as kingdom-wide fiscal pressure from Vision 2030 spending climbs.