Saudi Aramco reports bumper profits as it bypasses Strait of Hormuz

What Happened

Saudi Aramco reported a 33% surge in second-quarter adjusted net income to $33.4bn, driven by elevated energy prices caused by the US-Israeli war on Iran. The conflict has seen Iran assert control over the Strait of Hormuz, attacking vessels transiting via Oman’s territorial waters, while the US has bombarded Iran and Tehran has struck Gulf states. Brent crude rose above $100 per barrel in May and July, and refined product prices spiked. Saudi Arabia maintained around two-thirds of its pre-war oil exports using the East-West Pipeline from its eastern fields to the Red Sea port of Yanbu, bypassing the Strait of Hormuz. The pipeline’s success is spurring regional investment in alternative export routes: the UAE is doubling its Fujairah pipeline capacity by 2027, and Iraq signed a US-backed deal with Syria in July to rehabilitate a pipeline to the Mediterranean. US Treasury Secretary Scott Bessent said the US and Iran were close to a deal to stop fighting and reopen the Strait of Hormuz, though Brent crude has since dropped to $79 per barrel after President Trump retreated from threats of escalated bombing.

Key Actors

Why It Matters

The Strait of Hormuz, a critical chokepoint for global energy, is effectively contested, forcing a structural re-routing of Middle Eastern oil exports. This is accelerating tens of billions of dollars in new pipeline infrastructure that could permanently alter energy geopolitics and reduce Iran’s strategic leverage.

Watch For

Progress on the US-Iran deal mentioned by Treasury Secretary Bessent to halt hostilities and reopen the Strait of Hormuz; Brent crude price reactions; updates on bypass infrastructure projects, including the UAE’s Fujairah pipeline and the Iraq-Syria rehabilitation; any further US military escalation or ceasefire extensions.