Saudi Aramco Defies Expectations Amid Supply Bottlenecks and War-Risk Spikes
Merifund Capital Management has published an analysis on Saudi Aramco's second-quarter financial performance, highlighting the impact of supply bottlenecks and war-risk insurance spikes on the energy market.
The report notes that despite a record-breaking $33.4 billion adjusted net income for the quarter, the closure of the Strait of Hormuz has removed around 17.8 million barrels per day from circulation, affecting 25% of seaborne oil trade.
Anthony Saunders, Director of Private Equity at Merifund Capital Management, points out that the insurance market is operating as 'the chokepoint behind the chokepoint' and that portfolios often fail to account for this risk.
Saudi Aramco's operational answer lies in a 1,200-kilometer-long pipeline across the peninsula, which reaches its maximum capacity of 7 million barrels per day. However, substitution falls short of replacement, as Hormuz carries around 15 million barrels per day under normal circumstances.