Aramco profit surge signals oil market resilience

Saudi Aramco delivered a sharp first-quarter profit rebound, beating market expectations as higher crude prices, stronger sales volumes and improved downstream margins lifted the world’s largest oil company.

Net income attributable to shareholders rose to SAR 120.13 billion, or $32.04 billion, for the three months ended March 31, 2026, up 25.6 per cent from a year earlier. Adjusted net income increased to SAR 125.97 billion, or $33.59 billion, ahead of the roughly $31 billion expected by analysts, underlining Aramco’s capacity to convert firmer oil markets into earnings despite continuing volatility in global energy flows.

Revenue climbed 6.8 per cent year-on-year to SAR 433.10 billion, or $115.49 billion, supported mainly by higher crude oil prices, increased crude volumes sold and stronger pricing and volumes for refined and chemical products. The performance marked a clear turnaround from the weaker earnings environment that weighed on the company in parts of 2025, when lower realised prices and softer downstream conditions compressed margins.

The first-quarter figures reinforce Aramco’s central position in Saudi Arabia’s fiscal framework and the wider energy market. The company remains a crucial source of state revenue, dividend income and investment funding for the kingdom’s economic diversification programme. Riyadh and its sovereign wealth fund retain an overwhelming ownership stake in the company, making Aramco’s payout policy closely watched by investors, policymakers and credit analysts.

Aramco declared a base dividend of about SAR 82.08 billion for the quarter, equivalent to roughly $21.9 billion. The payout is aligned with its policy of maintaining a sustainable and progressive base dividend, even as the company balances shareholder returns with large capital spending commitments across oil, gas, chemicals and low-carbon initiatives.

The company reported cash flow from operating activities of $30.7 billion and free cash flow of $18.6 billion. Free cash flow was held back by a sizeable working capital build, while capital expenditure stood at $12.1 billion as Aramco continued to fund projects intended to strengthen long-term production capacity and expand its integrated energy portfolio. Gearing rose to 4.8 per cent at the end of March from 3.8 per cent at the end of 2025, still low by global energy-sector standards.

Oil market conditions provided a major earnings tailwind. Aramco’s average realised crude oil price rose to $76.90 a barrel in the quarter, compared with $76.30 a year earlier and $64.10 in the final quarter of 2025. The sequential improvement in prices helped offset cost pressures and supported stronger margins across parts of the value chain.

Downstream operations also contributed to the earnings increase. Higher prices and volumes for refined and chemical products improved the segment’s contribution after a period of uneven refining margins across global markets. Aramco has been working to deepen its downstream footprint through refining, petrochemicals and trading operations, aiming to capture more value from each barrel and reduce reliance on crude sales alone.

Chief executive Amin Nasser has continued to stress the importance of reliable oil and gas supply as energy demand grows and geopolitical risks threaten transport routes and production infrastructure. Aramco’s scale, low production costs and spare capacity give it a strategic advantage at a time when many international energy companies are weighing shareholder distributions against capital discipline and energy-transition spending.

The earnings also come as global oil producers navigate a delicate market balance. Demand has remained resilient in Asia and the Middle East, while supply policy among major exporting countries continues to influence prices. Any shift in production targets, sanctions enforcement, shipping disruption or refinery demand could quickly alter price expectations for the rest of 2026.