finance
Saudi Aramco Q1 Profit Rises 26%
Saudi Aramco posted net profit of $33.6 billion for the first quarter as higher oil prices from the regional conflict offset lower production and exports. The company maximized use of its East-West pipeline to bypass the closed Strait of Hormuz. Meanwhile Toyota reported a £3 billion hit from rising material costs and falling sales linked to the same war.
May 7, 6:00 AM·2m read14 sources
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Financial TimesAudio version
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Saudi Aramco reported a 26 percent increase in first-quarter profit as a war-induced rise in oil prices helped counter lower exports caused by the Iran conflict. The company posted net profit of $33.6 billion in the three months through March, up from the previous year.
Higher crude prices more than compensated for output that was cut by 2 million barrels per day and reduced export volumes. The conflict led to the closure of the Strait of Hormuz by Iran.
Multiple outlets confirmed the profit jump ranged between 25.5 percent and 26 percent depending on the exact baseline figure used. One report listed net profit at $32.5 billion while another cited $33.6 billion for the same period. The price surge occurred after Iran shut the Strait of Hormuz.
This allowed the company to record higher realizations per barrel even as physical volumes declined. The carmaker described the impact as one it was likely unable to fully absorb. The warning represents one of the largest corporate disclosures so far of direct business effects from the war.
It comes as Japanese exporters also face additional pressure from tariff increases. Toyota's fourth-quarter profit missed expectations by a wide margin. Revenue rose 1.89 percent year on year but was weighed down by the broader cost environment.
Global oil stockpiles fell at a rapid pace during March and April. Morgan Stanley estimated draws of about 4.8 million barrels per day between March 1 and April 25 as the conflict drained buffers. Major U.S. oil producers have not announced plans to increase drilling despite higher prices.
Companies cited volatile energy markets and the high cost of new exploration as reasons for caution even after policy encouragement to expand output. Higher jet fuel costs flowing from elevated oil prices have already begun pushing up airfares. Nintendo cited the combined pressure of tariff hikes and war-related cost increases as factors behind plans to raise Switch 2 prices while warning that sales could still decline next year.
