Saudi Aramco Profit Surges on War-Driven Oil Prices

Saudi Aramco reported a significant increase in second-quarter profit due to higher oil prices caused by the US-Iran war. The company's adjusted net income rose to $33.4 billion, beating analysts' estimates of $31.1 billion compiled by Bloomberg. This surge in profits comes as Brent crude averaged almost $97 a barrel during the quarter, causing windfall gains for Aramco. However, the company now faces new risks as Yemen's Houthi group threatens to attack tankers using the Red Sea route.

Aramco redirected most of its exports to the Red Sea after the closure of the Strait of Hormuz, which caused the biggest oil supply disruption in history. The company has been maximizing fuel exports to take advantage of higher prices and margins. Despite a brief dip in Brent crude prices following an interim US-Iran peace deal, product prices remained elevated.

The Houthi militants' attacks on vessels have opened up a new front in the war, threatening millions of barrels of Saudi crude and products. Severe and prolonged disruptions to Red Sea supplies would further rock the market, pushing prices higher as maritime traffic via Hormuz remains severely constrained.