Saudi Aramco’s profits surge despite war disrupting shipping routes & more related News Here

Saudi Arabia’s national oil company said its quarterly profit rose 25% as exports increased through a pipeline that bypasses the Strait of Hormuz, after the war in the Middle East disrupted shipping through the vital waterway.

Saudi Arabian Oil Co., known as Aramco and the world’s top oil exporter, made a net profit of $32.5 billion for the three months ended March 31, up from $26 billion in the same period last year.

Oil prices have surged since Iran effectively closed the Strait of Hormuz on February 28, sparking a war with the US and its allies in the region. Before the war about a fifth of the world’s oil and gas passed through waterways every day. To partially offset the disruption to its traditional export route, Aramco is rerouting more of its crude through its East-West Pipeline to the Red Sea port of Yanbu.

Aramco Chairman Chief Executive Amin H. Nasser said the East-West pipeline reached its maximum capacity of 7 million barrels per day during the quarter, proving itself to be a “vital supply artery.”

While higher oil prices are expected to reduce earnings for Aramco and other oil producers, the extent to which these companies are able to benefit ultimately depends on the reopening of the strait. The East-West Pipeline cannot replace all the crude oil flows carried by tanker ships, but its use is helping prevent an even worse crisis from unfolding.

The East-West pipeline network also links domestic refining centers in the region. The pipeline’s approximately 2 million barrels per day capacity supplies refineries on Saudi Arabia’s west coast, supplying both Saudi domestic markets and international buyers of refined fuel.

Oil futures ended last week with losses as the US proposal kept alive hopes of an end to the war with Iran and the eventual reopening of the Strait of Hormuz.