Saudi Aramco CEO Amin Nasser stated that recent attacks in July, including those by Yemen's Houthi rebels on operations along the Red Sea coast and other locations, had "no material impact" on the company's capabilities or operations. This announcement comes as Aramco also reported a significant 44% rise in second-quarter net profit, reaching $32.69 billion. The profit increase was primarily attributed to stronger prices for refined products, chemicals, and crude oil, outpacing analysts' estimates.
Despite these positive financial results, the regional energy market faces continued disruptions. The Iran war has disrupted flows through the Strait of Hormuz, which has seen trade flow at only a tenth of pre-conflict levels. Furthermore, a Houthi blockade in the Bab al-Mandeb Strait has complicated Saudi Arabia's efforts to utilize its East-West pipeline, an alternative route to the Red Sea. Nasser emphasized the flexibility of the East-West pipeline in navigating these disruptions.
Nasser highlighted the severe impact on global oil supply, stating that the world has lost over 2.6 billion barrels of oil, with an average of 11 million barrels per day of liquids supply removed. He warned that if the Strait of Hormuz were to reopen today, it would take up to 18 months at an average rate of 2.1 million barrels per day to replenish depleted inventories. The global refining system is also heavily stretched, and any major refinery shutdown could exacerbate pressure on the energy supply system. Saudi Arabia's oil sector contracted by 24.7% year-over-year, contributing to a 4.8% decline in the kingdom's real GDP in the second quarter.
