Dhahran: Saudi Aramco reported a sharp 25 per cent rise in first-quarter profit as escalating tensions in West Asia and disruptions around the Strait of Hormuz pushed global crude oil prices significantly higher.
The Saudi energy giant said ongoing geopolitical instability linked to the Iran conflict strengthened oil prices and improved the company’s financial performance during the quarter.
The profit increase comes amid heightened concerns over global oil supply disruptions as shipping activity through the strategically important Strait of Hormuz continues to face uncertainty.
Oil prices surge amid geopolitical tensions
Global oil markets have remained volatile due to tensions involving Iran, the United States and regional shipping routes in the Gulf.
Benchmark Brent crude prices rose 2.58 per cent on Sunday to reach $103.91 per barrel.
Although oil prices remain below wartime peaks of over $119 per barrel recorded earlier during the conflict, they continue to trade substantially above the nearly $70 levels seen before tensions escalated in late February.
The Strait of Hormuz, located between Iran and Oman, is one of the world’s most critical maritime routes for crude oil transportation.
A significant portion of global oil exports passes through the narrow waterway every day, making any disruption there a major concern for energy markets worldwide.
Industry analysts say fears of prolonged supply interruptions have continued supporting elevated oil prices over recent months.
Shipping disruptions impact global oil flows
The ongoing conflict has reportedly disrupted shipping movements across the Gulf region and forced oil companies to reconsider transportation routes and export strategies.
Aramco stated that it had rerouted part of its crude exports through alternative infrastructure to reduce dependence on the Strait of Hormuz.
The company relied heavily on Saudi Arabia’s East-West Pipeline, which transports crude oil from eastern oil fields to export terminals along the Red Sea coast.
The pipeline has allowed Saudi Arabia to continue oil exports despite instability affecting Gulf shipping operations.
Energy experts say the infrastructure has become increasingly crucial as risks surrounding tanker movements in the region continue to rise.
The situation has also increased concerns among importing nations regarding long-term supply security and future energy prices.
East-West Pipeline operating at full capacity
Amin Nasser, President and CEO of Aramco, highlighted the importance of the company’s domestic energy infrastructure during the ongoing crisis.
According to Nasser, the East-West Pipeline is currently operating at maximum capacity and transporting nearly 7 million barrels of crude oil per day across Saudi Arabia.
He said the pipeline is “helping to mitigate the impact of a global energy shock and providing relief to customers”.
Analysts believe the pipeline has played a critical role in stabilising Saudi crude exports and maintaining supply continuity for international buyers.
The infrastructure enables Saudi Arabia to bypass the Gulf shipping corridor and reduce exposure to potential maritime disruptions.
Global markets closely monitoring conflict
The conflict in West Asia continues to keep global financial and commodity markets on edge due to fears of broader regional instability.
Oil-importing countries, including India, are closely monitoring developments because prolonged high crude prices could increase inflationary pressure and widen trade deficits.
Higher oil prices also affect transportation, manufacturing and energy costs globally.
Saudi Arabia, as one of the world’s largest oil exporters, remains central to maintaining stability in global energy supplies during periods of geopolitical crisis.
Aramco’s strong earnings highlight how major oil producers can benefit financially from rising crude prices during periods of market uncertainty.
However, analysts warn that prolonged instability around the Strait of Hormuz could eventually create wider economic risks if supply disruptions intensify further.
Energy markets are expected to remain highly sensitive to developments in the region in the coming weeks as governments and oil companies continue adjusting strategies to manage geopolitical risks.