Saudi Arabian Oil Co. (Aramco) reported first-quarter net income of $26.3 billion on Wednesday, a 16% decline from the $31.4 billion print a year earlier and just below the $26.8 billion consensus from a Reuters poll of nine analysts. Free cash flow fell to $19.2 billion from $22.8 billion as capital expenditure rose 12% to $13.4 billion, reflecting accelerated investment in gas, downstream petrochemicals, and the firm's low-carbon hydrogen build-out.
Aramco maintained its base dividend of $20.3 billion for the quarter, on track for $81 billion of base payouts in 2026 plus the $43 billion performance-linked dividend program. The company reiterated full-year capex guidance of $58 billion-$62 billion, with the Jafurah unconventional gas development on track for first sales in late 2026. Hydrocarbon production averaged 12.0 million barrels of oil equivalent per day, with crude output of 8.95 mb/d in line with the OPEC+ voluntary-cut quota.
Iran-Conflict Risk Premium
CEO Amin Nasser said in the earnings call that Aramco "stands ready to deploy 3.0 million barrels per day of additional spare capacity" if requested by the market or if Iran retaliates against export-corridor infrastructure. Saudi Arabia has held this margin of spare capacity for over a decade. Nasser declined to predict whether OPEC+ would accelerate the unwinding of voluntary cuts beyond the 411,000 b/d May 1 increase already announced.
The realized crude price for Q1 was $77.20 per barrel, down 9% from the prior-year period, consistent with the broader market's OPEC+ Reference Basket performance. Refining and marketing margins were squeezed: downstream gross margin fell to $7.20 per barrel from $8.80, with the SATORP and SADARA petrochemical complexes weighing on profitability amid weaker product spreads.
Strategic Pivot to Gas and LNG
Aramco's strategic pivot toward gas and downstream remains the structural narrative. The company's gas-production target of 75 standard cubic feet per day by 2030 is nominally on track, with Jafurah expected to deliver 2.0 billion scf/d at plateau. Aramco closed the acquisition of a 30% stake in Brazil's ATCO downstream petrochemical business and committed an additional $4 billion to MidOcean Energy LNG entities. The firm flagged a likely Saudi Aramco Trading expansion into European LNG cargoes in H2.