--- title: "Saudi Aramco's Q2 net profit surged by 33%, CEO warns: Strait blockade triggers \"historical largest oil supply shock,\" losing 10 million barrels of supply weekly" type: "News" locale: "en" url: "https://longbridge.com/en/news/294848588.md" description: "Saudi Aramco's net profit in the second quarter increased by 33% year-on-year to $33.4 billion, exceeding expectations. The CEO warned that the blockade of the Strait of Hormuz has caused the \"largest oil supply shock in history,\" with a weekly loss of 10 million barrels. Despite high oil prices boosting profits, the company's dividends exceeded free cash flow, and the debt-to-equity ratio rose to 6.2%, relying on the balance sheet to support shareholder returns" datetime: "2026-08-04T15:51:10.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294848588.md) - [en](https://longbridge.com/en/news/294848588.md) - [zh-HK](https://longbridge.com/zh-HK/news/294848588.md) --- # Saudi Aramco's Q2 net profit surged by 33%, CEO warns: Strait blockade triggers "historical largest oil supply shock," losing 10 million barrels of supply weekly As the crisis in the Strait of Hormuz continues to escalate, Saudi Aramco has delivered an unexpectedly strong quarterly performance. According to Saudi Aramco's announcement on Tuesday, **the adjusted net profit for the second quarter increased by 33% year-on-year to $33.4 billion, exceeding Bloomberg's consensus estimate of $31.1 billion.** Driven by a significant rise in oil prices, the company's actual average selling price of oil during the period rose to $108.10 per barrel, significantly higher than $66.70 in the same period last year. However, while announcing impressive results, the company's management issued a more severe warning regarding the global crude oil supply outlook. Amin H. Nasser, President and CEO of Saudi Aramco, stated that **the blockade of the Strait of Hormuz has resulted in approximately 10 million barrels of crude oil being unable to enter the global market each week, with a cumulative supply reduction of over 2.6 billion barrels since the crisis began at the end of February this year, constituting "the largest oil supply shock in history."** He anticipates that even if the strait resumes navigation in the future, it may take up to 18 months for global oil inventories to return to normal levels. This assessment aligns with market views. Goldman Sachs commodity analysts Samantha Dart and Daan Struyven previously pointed out that while crude oil supply is disrupted, the refining sector is facing greater pressure, with diesel supply becoming one of the tightest segments in the global refined oil market. ## High Oil Prices Boost Profits, but Dividends Still Exceed Cash Flow The surge in international oil prices has become the main driver of Saudi Aramco's profit growth. In the second quarter, the average price of Brent crude oil approached $97 per barrel, while Saudi Aramco achieved an average selling price of $108.10 per barrel, an increase of over 60% year-on-year, driving the adjusted net profit to $33.4 billion, surpassing market expectations. However, **the improvement in earnings has not fully alleviated the company's cash flow pressure.** In the second quarter, Saudi Aramco's free cash flow was $12.3 billion, while the base dividend remained at $21.9 billion, with the dividend payout nearly double the free cash flow, indicating that the company still relies on its balance sheet to support shareholder returns. As a result, the company's debt-to-equity ratio rose from 4.8% at the end of the first quarter to 6.2%. Since Saudi Aramco's dividends have long been an important source of revenue for the Saudi government, the market generally expects the company to find it difficult to significantly cut dividends in the short term. However, the continued dividend policy exceeding cash flow also means that financial leverage may further increase. ## East-West Pipeline Ensures Exports, but Production Still Declines Significantly During the shutdown of the Strait of Hormuz, Saudi Aramco relied on the East-West Pipeline to transport crude oil to Red Sea ports, along with storage facilities to maintain export capacity. However, the alternative transportation routes have not fully compensated for the impact of the strait's closure In the second quarter, **the company's liquid production decreased by 28% year-on-year to 7.57 million barrels per day, and natural gas production also fell by 16% year-on-year, reflecting that alternative pipeline transportation capabilities still cannot fully replace the Strait of Hormuz.** At the same time, the East-West pipeline continues to operate at high capacity, further highlighting the strategic value of alternative export routes. As this round of crisis exposes the Strait of Hormuz as a global energy transportation bottleneck, the market expects that in the coming years, infrastructure investments in the Middle East related to the construction of new oil pipelines, expansion of existing lines, and construction of new export ports are likely to increase further, thereby gradually reducing the region's energy export dependence on the Strait of Hormuz. ## Inventory recovery may take 18 months, refining tensions will continue Compared to the recovery of crude oil supply, inventory rebuilding and refining system restoration may take longer. Nasser stated, **even if the Strait of Hormuz reopens, it may still take 18 months for global commercial inventories to return to normal levels.** Goldman Sachs also believes that this round of supply shock has gradually transmitted from the crude oil market to the refined oil market, with diesel supply being particularly tight, and refining margins are expected to remain high. This means that even if the geopolitical situation eases in the future, the tight supply and demand situation in the energy market may not quickly alleviate. For the global economy, higher energy costs and refined oil prices may continue to exert inflationary pressure for some time; for the energy industry, this round of crisis may also become an important catalyst for reshaping global crude oil transportation infrastructure ### Related Stocks - [UCO.US](https://longbridge.com/en/quote/UCO.US.md) - [USOI.US](https://longbridge.com/en/quote/USOI.US.md) - [USO.US](https://longbridge.com/en/quote/USO.US.md) - [SCO.US](https://longbridge.com/en/quote/SCO.US.md) - [03097.HK](https://longbridge.com/en/quote/03097.HK.md) - [BNO.US](https://longbridge.com/en/quote/BNO.US.md) - [XLE.US](https://longbridge.com/en/quote/XLE.US.md) - [VDE.US](https://longbridge.com/en/quote/VDE.US.md) - [IXC.US](https://longbridge.com/en/quote/IXC.US.md) - [XOP.US](https://longbridge.com/en/quote/XOP.US.md) - [IEO.US](https://longbridge.com/en/quote/IEO.US.md) - [IEZ.US](https://longbridge.com/en/quote/IEZ.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - [XES.US](https://longbridge.com/en/quote/XES.US.md) - [PXJ.US](https://longbridge.com/en/quote/PXJ.US.md) - [CRAK.US](https://longbridge.com/en/quote/CRAK.US.md) - [ERX.US](https://longbridge.com/en/quote/ERX.US.md) - [ERY.US](https://longbridge.com/en/quote/ERY.US.md) - [DUG.US](https://longbridge.com/en/quote/DUG.US.md) - [MLPA.US](https://longbridge.com/en/quote/MLPA.US.md) - [03175.HK](https://longbridge.com/en/quote/03175.HK.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) ## Related News & Research - [ROI-Asia crude and fuel imports recover, still shy of pre-Iran war levels: Russell](https://longbridge.com/en/news/294772977.md) - [W.Africa Crude - Differentials stable as traders mull supply disruptions elsewhere](https://longbridge.com/en/news/294402146.md) - [US Cash Crude-Grades ease as US President Trump holds off on a fresh Iran attack](https://longbridge.com/en/news/294740259.md) - [Oil tumbles as Trump cancels attack on Iran to reach nuclear deal](https://longbridge.com/en/news/294614703.md) - [RUBBER-Japan futures fall as Chinese tyre demand stays soft, oil slips](https://longbridge.com/en/news/295043268.md)