The Iran War Continues Keeping Energy Markets On Edge. Saudi Aramco Profits Are Jumping.

Saudi Aramco posted stronger-than-expected second-quarter earnings on Tuesday as higher crude oil and refined product prices lifted revenue during a quarter marked by severe disruption to global energy supplies.

The world's largest oil producer reported adjusted net income of 125.2 billion Saudi riyals ($33.4 billion) for the three months ended June, up 33% from a year earlier and ahead of analysts' expectations of $31.6 billion. The company also declared a base dividend of $21.9 billion for the quarter, CNBC reported.

The earnings reflect the sharp rise in oil prices following months of conflict involving Iran and its regional allies, which have disrupted shipments through the Strait of Hormuz, one of the world's busiest oil transit routes. Higher prices for crude oil as well as refined and chemical products offset lower sales volumes during the quarter, Saudi Aramco said.

To maintain exports, the Saudi state-owned energy giant continued routing shipments through its 1,200-kilometer East-West pipeline, which carries crude from the kingdom's eastern oil fields to the Red Sea, bypassing the Strait of Hormuz. The company said the infrastructure allowed it to sustain export capacity of up to 7 million barrels per day despite regional disruptions.

"Despite the unprecedented supply disruption through the Strait of Hormuz, we continued to demonstrate our ability to maintain business continuity," President and CEO Amin H. Nasser said in the company's earnings statement, citing the East-West pipeline, storage facilities and export terminals as key factors supporting operations, Reuters reported.

Aramco reported $25.4 billion in cash flow from operating activities during the quarter. Its gearing ratio rose to 6.2% at the end of June from 4.8% three months earlier.

Speaking to analysts after the results, Nasser described the ongoing geopolitical crisis as the "biggest supply shock in history," saying more than 2.6 billion barrels of oil destined for industries including manufacturing, agriculture, chemicals and semiconductors had been removed from global markets. Strategic infrastructure and inventory management helped reduce the effective shortfall to around 1.8 billion barrels, he said, while warning that replenishing depleted inventories could take up to 18 months even if shipping through the Strait of Hormuz resumed immediately.

Aramco's results follow similarly strong quarterly earnings from major U.S. oil producers. Exxon Mobil reported second-quarter profit of $14.5 billion, more than double a year earlier, while Chevron posted earnings of $12 billion, nearly four times the level recorded during the same period last year.

The strong profits have drawn political scrutiny in the United States. On Monday, President Donald Trump criticized major oil companies for benefiting from higher fuel prices during the Iran conflict, saying Exxon and Chevron were making "too much money" because of supply shortages while reiterating his call for lower gasoline prices, according to the outlet.