11/05/2026

BIZ & FINANCE MONDAY | MAY 11, 2026

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Soaring energy profits reignite calls for windfall tax with peaks of US$120, compared with US$70 before hostilities began in late February.

Aramco Q1 earnings

jump 25% as Hormuz risks push pipeline to full capacity RIYADH: Saudi Aramco reported a 25% jump in first-quarter profit on Sunday, showing its resilience as US-Iran war tensions curtail Strait of Hormuz shipping, with the state oil giant’s East-West crude pipeline running at full capacity to mitigate the impact to supplies. The world’s top oil exporter earned a net profit of US$32.5 billion in the three months ended March 31, beating an LSEG consensus estimate of US$30.95 billion. Total revenue surged nearly 7% from a year earlier to US$115.49 billion due to higher prices and volumes sold of both crude oil and refined and chemical products. Iran’s blockade of shipping through the crucial Hormuz waterway amid the US-Israeli conflict – which has curtailed energy supply and sent prices surging – prompted Aramco to ramp up crude flows from its east coast to the Red Sea port of Yanbu. “Our East-West Pipeline, which reached its maximum capacity of 7 million barrels of oil per day, has proven itself to be a critical supply artery, helping to mitigate the impact of a global energy shock,“ Aramco CEO Amin Nasser said, adding that “reliable energy supply is critical”. The pipeline can supply about 2 million bpd to refineries on Saudi Arabia’s west coast, leaving 5 million bpd for export. During the war, Saudi Arabia cut output by 2 million bpd after Iran blockaded Hormuz, a waterway that carried a fifth of world oil supply before the war. The line mainly carries Arab Light and some Arab Extra Light, with heavier grades curtailed. Aramco’s adjusted quarterly net profit was US$33.6 billion, beating a company provided median analyst estimate of US$31.16 billion. The figure strips out US$1.06 billion in non-operational accounting items. Capital expenditure fell slightly to US$12.1 billion in the quarter from US$12.5 billion a year prior, and was sharply down from US$13.4 billion in the fourth quarter. Aramco had outlined US$50-55 billion in capital expenditure this year. Aramco declared a first-quarter base dividend of US$21.9 billion, up 3.5% year-on-year and payable in the second quarter, in line with expected total dividends of US$87.6 billion for 2026. It had also introduced a performance linked dividend in 2023 linked to free cash flow. The Saudi state relies heavily on Aramco’s payouts to fund domestic spending and cover budget gaps. The government directly owns almost 81.5% of the company, while the Public Investment Fund holds 16%. Free cash flow slipped to US$18.6 billion from US$19.2 billion a year earlier, impacted by a US$15.8 billion rise in working capital. Aramco’s gearing – measuring its debt compared to equity – rose to 4.8% at March 31 from 3.8% at the end of 2025. – Reuters

French President Emmanuel Macron is meanwhile calling for a European response in the face of excessive energy firm windfall profits or “speculative behaviour”. Analysts consulted by AFP indicate companies are expected to post strong profits again in the second quarter. “Even if tensions ease, markets do not suddenly snap back to normal overnight,” observed Innes. “I am not sure this conflict will get resolved that easily,” said Adi Imsirovic, senior lecturer in energy systems at Oxford University. That would keep prices higher for longer. That scenario is likely to stimulate new oil and gas projects, as envisaged by TotalEnergies, involving small-scale fields capable of rapid production. Innes believes companies will prefer to put their faith in low-cost projects rather than rushing “blindly” into massive expansion. “The winners will likely be the projects that are low-cost, flexible, and geopolitically secure, rather than massive expansion for expansion’s sake,” he added. In recent years, BP and Shell have scaled back several climate targets in favour of continuing oil and gas production. More recently, TotalEnergies announced it could no longer commit to its 2050 carbon neutrality target, stressing the world was not yet ready to move on from oil. The conflict has, nonetheless, brought the role of renewable energy in energy security back into the spotlight. “This has not gone unnoticed in all capitals across the globe,” said Imsirovic. – AFP

o European oil and gas majors benefit from both higher prices and turbulence PARIS: European oil and gas companies that posted huge profits in the first quarter on soaring prices caused by the war in the Middle East face new calls from London to Paris to tax their outsized gains. Shell rounded out the major energy producers’ earnings season on Thursday by announcing net profit of nearly US$5.7 billion (RM22.4 billion), up 19% on the first quarter of 2025. The group explained it had benefited from higher prices and “increased refining margins,” as well as “a higher contribution from trading activities”. It was a similar story for British rival BP, which reported a sharp rise in profits at the end of last month, posting US$3.84 billion while TotalEnergies saw their profits soar 51% to US$5.8 billion. In contrast, US energy companies ExxonMobil and Chevron saw their profits decline, results affected by an unfavourable time lag between the sale and delivery of products within the derivatives markets. The US-Israeli war on Iran prompted Tehran to blockade the key energy chokepoint of the Strait of Hormuz, causing a sharp drop in oil supplies on the market and a surge in prices. A barrel of Brent crude, the global benchmark, averaged around US$100 in March,

That notably helped European trio BP, Shell and TotalEnergies, which have strong trading operations – unlike their US counterparts and rivals ExxonMobil and Chevron, which are more reliant on production activities. The big difference this quarter is that “BP, Shell and Total benefited from both the higher prices and the turbulence itself”, Stephen Innes, analyst with SPI Asset Management, told AFP. He added that “the European majors looked less like traditional oil companies this quarter and more like sophisticated volatility traders operating inside the global energy system”. From London to Paris the strong results have sparked calls to tax oil company windfall profits, as occurred following the war in Ukraine which started in 2022. “Once again, the fossil fuel giants are raking in massive profits,” lamented Danny Gross of NGO Friends of the Earth in a statement which called for increased taxes on profits. In the UK, oil companies operating in the North Sea remain subject to the Energy Profits Levy, a temporary levy on profits arising from the upstream production of oil and gas introduced in 2022, which has been extended and increased several times. It is currently set at 38% of profits until 2030 and is in addition to the 40% of taxes already in force in the sector. However, it only applies to profits derived from UK oil and gas production. The surging profits at Shell and BP has brought more calls to increase these levies, with UK Energy Minister Ed Miliband notably condemning what he termed “excessive profits”.

Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia. – REUTERSPIC

Parent company of Trump’s Truth Social reports US$400m loss WASHINGTON: The parent company of Truth Social, President Donald Trump’s social media platform, reported a net loss last week of more than US$400 million in the first quarter – mostly from tumbling cryptocurrency valuations. TMTG is also active in financial services, and the company announced US$2.5 billion in funding a year ago to invest in cryptocurrencies, one of Trump’s recent passions.

“The vast bulk” of the loss was due to digital assets, the company stated. According to its filing, TMTG generated US$900,000 in revenue during the first quarter, a paltry amount for a company valued at US$2.47 billion on the stock market. The company says it continues “to focus on expanding its infrastructure and audience to prepare for future monetised features”. TMTG said in December that it is merging with the American company TAE, which is developing nuclear fusion technology. That deal was expect to close in mid-2026. – AFP

But the plunge in digital currencies hit this part of the business hard as the price of Bitcoin tumbled from over US$126,000 in early October to below US$70,000 in March. It has since rebounded somewhat to over US$80,000. Because the company is required to reveal the value of its investments, even if it has not sold them, it recorded a loss of US$406 million for the first quarter.

Trump Media & Technology Group (TMTG) reported revenue of less than US$1 million for the three months ending March 31, according to a company filing. The president, who routinely uses Truth Social to make official announcements, controls about 41% of TMTG’s shares, which are held in the trust established to manage his financial interests during his presidency.