Saudi Aramco delivered a stronger first quarter for 2026, lifting adjusted net income to $33.6 billion as higher crude, refined fuel and chemical prices offset operating strain from disrupted Gulf shipping. The Dhahran-based energy group also declared a $21.9 billion base dividend for the quarter, reinforcing its central role in Saudi public finances and global energy supply.
Adjusted net income rose from $26.6 billion a year earlier, while cash flow from operating activities stood at $30.7 billion. Free cash flow slipped to $18.6 billion, reflecting a $15.8 billion working-capital build, and gearing rose to 4.8 per cent at the end of March from 3.8 per cent at the close of 2025. Capital expenditure reached $12.1 billion, underscoring Aramco’s effort to preserve investment in upstream capacity, gas expansion, downstream integration and infrastructure resilience despite a volatile market.
The quarter was shaped by the sharp reordering of oil trade after shipping through the Strait of Hormuz was severely restricted following the February 28 outbreak of military action involving Iran, the United States and Israel. Brent averaged $103 a barrel in March, $32 higher than February, while daily prices approached $128 on April 2. Aramco’s average realised crude price for the first quarter was $76.90 a barrel, compared with $64.10 in the previous quarter and $76.30 a year earlier.
Aramco said its East-West Pipeline, linking oilfields in the east of Saudi Arabia to Yanbu on the Red Sea, reached its maximum capacity of 7.0 million barrels per day during the quarter. President and chief executive Amin H. Nasser described the line as a “critical supply artery” that helped customers affected by shipping constraints in the Strait of Hormuz. Domestic and international storage also gave the company greater flexibility as tanker routes, loading schedules and refinery feedstock flows came under pressure.
The pipeline’s importance has increased because the oil shock has not been confined to one producer or route. Global oil supply fell by 10.1 million barrels per day to 97 million barrels per day in March, while crude and product flows through the Strait of Hormuz dropped from more than 20 million barrels per day in February to about 3.8 million barrels per day in early April. Alternative routes through Saudi Arabia’s west coast, Fujairah and the Iraq-Türkiye pipeline expanded, but not enough to fully replace disrupted flows.
The disruption has also narrowed the line between corporate performance and macroeconomic risk. Global observed oil inventories fell by 85 million barrels in March, while crude stocks in oil-importing Asian economies dropped by 31 million barrels. Refiners facing feedstock shortages cut runs, product markets tightened and demand was curbed in parts of Asia and the Middle East. These pressures strengthened Aramco’s earnings in the quarter, but they also raised uncertainty over physical supply, freight availability and downstream margins.
Aramco’s dividend remains a key signal for investors because the Saudi state and related entities continue to hold an overwhelming majority of the company. The 3.5 per cent year-on-year increase in the base dividend helps support government revenue and the Public Investment Fund’s wider investment programme, even as the company balances shareholder returns with heavy capital commitments. The absence of a large performance-linked payout, compared with the windfall-distribution era of 2022-24, keeps attention on free cash generation and gearing.
The company is scheduled to discuss its first-quarter 2026 financial results in an audio webcast on May 11 at 3pm Riyadh time, 1pm London and 8am New York. Investors are expected to focus on whether the pipeline can remain at peak utilisation, how much storage flexibility remains, whether crude-export volumes can normalise, and how management views capital spending in a market where price strength is being driven as much by disruption as by underlying demand.
Adjusted net income rose from $26.6 billion a year earlier, while cash flow from operating activities stood at $30.7 billion. Free cash flow slipped to $18.6 billion, reflecting a $15.8 billion working-capital build, and gearing rose to 4.8 per cent at the end of March from 3.8 per cent at the close of 2025. Capital expenditure reached $12.1 billion, underscoring Aramco’s effort to preserve investment in upstream capacity, gas expansion, downstream integration and infrastructure resilience despite a volatile market.
The quarter was shaped by the sharp reordering of oil trade after shipping through the Strait of Hormuz was severely restricted following the February 28 outbreak of military action involving Iran, the United States and Israel. Brent averaged $103 a barrel in March, $32 higher than February, while daily prices approached $128 on April 2. Aramco’s average realised crude price for the first quarter was $76.90 a barrel, compared with $64.10 in the previous quarter and $76.30 a year earlier.
Aramco said its East-West Pipeline, linking oilfields in the east of Saudi Arabia to Yanbu on the Red Sea, reached its maximum capacity of 7.0 million barrels per day during the quarter. President and chief executive Amin H. Nasser described the line as a “critical supply artery” that helped customers affected by shipping constraints in the Strait of Hormuz. Domestic and international storage also gave the company greater flexibility as tanker routes, loading schedules and refinery feedstock flows came under pressure.
The pipeline’s importance has increased because the oil shock has not been confined to one producer or route. Global oil supply fell by 10.1 million barrels per day to 97 million barrels per day in March, while crude and product flows through the Strait of Hormuz dropped from more than 20 million barrels per day in February to about 3.8 million barrels per day in early April. Alternative routes through Saudi Arabia’s west coast, Fujairah and the Iraq-Türkiye pipeline expanded, but not enough to fully replace disrupted flows.
The disruption has also narrowed the line between corporate performance and macroeconomic risk. Global observed oil inventories fell by 85 million barrels in March, while crude stocks in oil-importing Asian economies dropped by 31 million barrels. Refiners facing feedstock shortages cut runs, product markets tightened and demand was curbed in parts of Asia and the Middle East. These pressures strengthened Aramco’s earnings in the quarter, but they also raised uncertainty over physical supply, freight availability and downstream margins.
Aramco’s dividend remains a key signal for investors because the Saudi state and related entities continue to hold an overwhelming majority of the company. The 3.5 per cent year-on-year increase in the base dividend helps support government revenue and the Public Investment Fund’s wider investment programme, even as the company balances shareholder returns with heavy capital commitments. The absence of a large performance-linked payout, compared with the windfall-distribution era of 2022-24, keeps attention on free cash generation and gearing.
The company is scheduled to discuss its first-quarter 2026 financial results in an audio webcast on May 11 at 3pm Riyadh time, 1pm London and 8am New York. Investors are expected to focus on whether the pipeline can remain at peak utilisation, how much storage flexibility remains, whether crude-export volumes can normalise, and how management views capital spending in a market where price strength is being driven as much by disruption as by underlying demand.
Topics
Spotlight