Saudi Aramco Profits Surge 33% to $33.4B as Crude Spikes Amid Strait of Hormuz Crisis

Saudi Aramco reported a 33% jump in second-quarter adjusted net income to $33.4 billion, beating market expectations of $31.1 billion as global crude prices surged to $108.10 per barrel amid severe shipping disruptions caused by the U.S.-Iran conflict.

To bypass the volatile Strait of Hormuz—a narrow maritime corridor through which roughly 20% of global petroleum flows—Aramco redirected oil shipments via its 1,200-kilometer East-West Pipeline to Red Sea export terminals. The infrastructure shift allowed the state energy giant to sustain export continuity, although Red Sea shipping routes face growing secondary security threats from Houthi attacks near the Bab el-Mandeb strait.

Despite Aramco’s windfall earnings, Saudi Arabia’s gross domestic product contracted by 4.8% in the second quarter, marking its sharpest economic downturn since the pandemic. The slump was driven by a 24.7% drop in domestic oil activity, contrasting sharply with 3% overall economic growth in the first quarter. However, crude prices averaging $108.10 per barrel, up from $66.70 a year earlier, dramatically narrowed the kingdom’s quarterly fiscal deficit to SAR 34.3 billion ($9.1 billion), down from SAR 125.7 billion in the previous quarter.

The energy market turbulence comes amid conflicting diplomatic signals over the Strait of Hormuz. Following claims by U.S. President Donald Trump that Tehran sought immediate negotiations after Washington paused military action, Iranian Foreign Ministry spokesperson Esmaeil Baghaei denied direct talks with the U.S. Baghaei confirmed Tehran is instead consulting with Oman on establishing a temporary safe passage. Concurrently, the International Chamber of Commerce (ICC), headed by Secretary General John Denton, outlined a UN-backed mechanism aimed at neutral governance and deconfliction to reopen the strait safely.

Oman has emerged as relatively insulated from the regional conflict, using higher energy revenues to accelerate its Vision 2040 diversification goals. The sultanate approved 74 major projects valued at $1.9 billion and issued 60 tenders worth $949 million during the first seven months of 2026. Major awards include a $521 million pharmaceutical contract and a $410 million expansion of the Muscat Expressway. Future Fund Oman, managed by the Oman Investment Authority, also launched a $1.74 billion portfolio of 105 projects, building on fiscal reforms that reduced government debt to 36% of GDP in 2025 from 68% in 2020.

In technological alliances, the U.S. government announced $300 million in funding for GlobalFoundries—73% owned by Abu Dhabi sovereign fund Mubadala—to develop silicon photonics for energy-efficient AI data centers. The grant expands upon $1.5 billion awarded in 2024 for manufacturing sites in New York and Vermont. Concurrently, Mubadala committed $170 billion, representing 44% of its overall portfolio, to U.S. sectors including artificial intelligence, semiconductors, and healthcare, following the relaxation of U.S. export restrictions on AI chips for UAE firms G42 and Core42.

In broader market movements, Tel Aviv cybersecurity company Zenity raised $125 million from SoftBank, Hitachi, and LG to develop real-time monitoring for autonomous AI agents inside corporate networks. In media, the $110 billion Paramount-Skydance acquisition of Warner Bros. Discovery faced legal hurdles, triggering a $650 million quarterly ticking fee starting September 30. Meanwhile, Abu Dhabi-backed esports team Nigma Galaxy reached the Dota 2 quarter-finals at the Esports World Cup in Paris, vying for a share of the $75 million prize pool.