War Disruptions Lift Aramco Profits as Deficit Grows

Saudi Aramco’s adjusted net income rose 9% year over year to SAR 117 billion ($31.2 billion) in the third quarter, as war disrupted energy markets and Saudi Arabia raised its projected budget deficit. Reported net profit climbed 34.6% to 135.9 billion riyals ($36.2 billion). Those figures put corporate gains alongside a war that has disrupted shipping, pushed up refining margins and prices, and fueled inflation.

Aramco’s Board of Directors announced a base dividend of SAR 82.1 billion ($21.9 billion), up 3.5% year over year, for payment in the fourth quarter. Cash flow from operating activities reached SAR 145.2 billion ($38.7 billion), compared with SAR 135.4 billion ($36.1 billion) in the third quarter of 2025. Free cash flow rose to SAR 105.8 billion ($28.2 billion) from SAR 88.4 billion ($23.6 billion). By the end of September, the company had cut its gearing ratio to 5.5%, down from 6.2% at the end of June.

Profits in a disrupted market

Aramco President and CEO Amin Nasser said geopolitical uncertainty and attacks on key energy facilities had “continued to amplify the global energy supply crisis” and had “serious implications for global energy security.” He credited the company’s workforce, operational system and supply network for keeping deliveries going. Around the world, energy companies have also seen earnings rise amid Middle East oil and gas supply disruptions, which pushed refining margins and prices higher.

Twelve analysts put the median consensus for Aramco’s adjusted net income at $30.66 billion. Robert Mogielnicki, a research fellow at the Arab Gulf States Institute, told AFP the results were likely “rosier compared (with) a year ago, when oil prices were much lower, but less promising relative to last quarter.” In the second quarter, Aramco reported a 44% year-on-year increase in net profit to 122.6 billion riyals.

The war began on February 28, when the US and Israel struck Iran. Yemen’s Iran-backed Houthis have regularly targeted Saudi tankers, pipelines, storage facilities and refineries since hostilities resumed in July, and strikes have intensified in recent weeks. Last month, the Houthis said they targeted Aramco’s headquarters. Saudi officials said a building was hit in the area housing Aramco’s operations centre; two company employees who spoke to AFP on condition of anonymity said a tower at the headquarters was struck.

Armed routes, public costs

The Strait of Hormuz remains contested. US military naval escorts have enabled millions of barrels of crude to pass through the waterway each day. Last month, US Central Command said it had helped Gulf countries export more than 1.5 billion barrels through the strait since the summer and facilitated passage for more than 3,000 commercial vessels over the past six months. Oil prices fell more than 7% on Monday as signs of renewed dialogue between Tehran and Washington raised hopes that the war could end.

The conflict has also disrupted shipping through the straits of Bab al-Mandeb and Hormuz, complicating exports. Ukrainian drones have battered Russian energy infrastructure, prompting Moscow to ban exports of certain products, notably petrol and diesel. Armed forces, state export controls and corporate supply networks all shape how energy moves through a conflict zone. People also feel the cost through inflation.

Saudi Arabia raised its projected 2026 budget deficit to 245 billion riyals, or 4.9% of gross domestic product, from an initial forecast of 165 billion riyals, even though government revenues exceeded initial forecasts. Government spending is expected to exceed initial projections by 9.3%. The finance ministry forecasts the Saudi economy will contract by 3.6% in 2026, driven by a 21.8% decline in oil-related activity.

Expansion while the books tighten

Aramco says it is seeking more overseas storage capacity and alternative export routes to strengthen its global supply network. The East-West Pipeline continued to provide additional oil export options. Production began at the Zuluf crude oil increment project, while Phase Two of the Jafurah gas field project, the Fadhili Gas Plant expansion and the Dammam field development project were progressing on schedule.

The company also acquired a 49% stake in HUMAIN, expanding its artificial intelligence investments through an asset transfer and cash contributions valued at around SAR 9.9 billion ($2.6 billion). It signed a shareholders’ agreement to establish a joint venture for mineral exploration and hard-rock mining. Nasser said Aramco would use its balance sheet to execute priority projects and “deliver value for our shareholders and customers.” Meanwhile, the kingdom expects a deficit of 191 billion riyals, or 3.6% of GDP, in 2027 as it continues investment in economic diversification projects. The IMF expects Saudi Arabia’s GDP to contract 3.3% this year, five percentage points lower than its previous forecast in July.