Profit hits record as production falls: How was Saudi oil giant Aramco affected by the war?

PRODUCTION FELL, PRICES SOARED

Saudi Arabia's national oil company, Aramco, announced that its profit in the second quarter of 2026 reached its highest level since 2022. Despite disruptions in maritime transport in the Persian Gulf due to the war with Iran and a decrease in Saudi Arabia's oil production, Aramco's quarterly adjusted profit exceeded 33 billion dollars.

Although the company's production volume fell by approximately 25 percent compared to the same period last year, the increase of over 60 percent in oil prices more than covered this gap. According to experts, Aramco, which produces at a low cost, is among the companies that benefit most from rising prices during crisis periods. Not only crude oil, but the profit generated from refining and marketing divisions also nearly doubled during this period.

ALTERNATIVE ROUTE FOR EXPORTS: EAST-WEST PIPELINE

The geopolitical tensions experienced have brought the dependence on the Strait of Hormuz for oil shipments back to the agenda. Saudi Arabia managed to mitigate the risks in maritime transport by directing more than 70 percent of its exports to the East-West Pipeline, which extends to the Yanbu Port on the Red Sea coast.

With a capacity of approximately five million barrels per day, this pipeline played a critical role in Aramco's continued operations. Company CEO Amin Nasser emphasized that despite unprecedented disruptions, operations continued uninterrupted thanks to decades of planning and the diversity they possess.

HAS ARAMCO'S PROFIT REFLECTED IN THE COUNTRY'S ECONOMY?

A large portion of the massive revenue generated by Aramco is transferred directly to the Saudi government and the Public Investment Fund through dividend payments. However, this bright picture on the company's balance sheet is not moving in the same direction as the Saudi Arabian economy as a whole. According to official data, the country's gross domestic product (GDP) shrank by 5 percent in the second quarter.

Economists point out that high oil prices increased Aramco's revenues, but the decline in the volume of goods and services produced caused the economy to contract. Furthermore, rising insurance and transportation costs due to the conflicts are also eroding a portion of the additional income generated. The International Monetary Fund (IMF) warns that a prolonged crisis could damage investor confidence and disrupt the Vision 2030 program, which aims to grow the country's non-oil sectors. Experts underline that despite short-term profit increases, Saudi Arabia's real need is regional stability.

News Source: 12punto