THIS MORNING: Aramco’s infrastructure investments paid off in crisis time

Good morning, ladies and gents. It’s another issue where we stress about Saudi’s fiscal resilience, and analysts are telling us things could go either way for our budget deficit when (or if?) Hormuz reopens for business. It’s also another earnings-heavy issue with the likes of Al Othaim Markets, Jarir Marketing, Sasco, and more showing their books for 1Q.

SPEAKING OF- Aramco chief Amin Nasser expressed pride in the oil giant’s better-than-expected 1Q results, telling analysts in an earnings call that the company’s wide-ranging investments in its infrastructure paid off in a time of crisis.

What made the difference? The robust East-West pipeline, which can export some 5 mn bbl / d through Yanbu’s north and south terminals, a capacity that Aramco is working to increase even further, according to Nasser. Localized supply chains also meant local content was immediately deployed to fix disruptions and restore output. “We would have been delayed for months — if not years — if the restoration elements that we needed were not available and handy within the Kingdom,” Nasser said.

The strait is choking off a big chunk of supplies. Oil markets are losing 100 mn barrels every week the strait remains shut, Nasser estimated. Dipping into storage is threatening global stockpiles and masking how tight the market actually is, with most of the spare capacity locked behind Hormuz in the Arabian Gulf, he added.

Rationing could bring demand growth down to 700-900k bbl / d if the strait remains closed. Still, demand is poised for a strong recovery if the strait fully opens, “significantly higher than initial estimates” for 2026, Nasser said.

^^ We have more on the oil giant’s earnings (and what they mean for global trade) in this morning’s Planet Finance.

Watch this space

EXPANSION — JLL is setting up a sports and entertainment hub in Riyadh, the real estate services firm said in a statement. The new base will serve clients across the region and globally, offering everything from leasing and operations to development advisory and investment support for stadiums, arenas, theme parks, cinemas, and other entertainment venues.

Who’s running it? Ahmed Abas (LinkedIn) has been appointed regional head of sports and entertainment for the Middle East and Africa. He’s a PPP specialist with over 15 years in the region, and sits on the advisory boards of the Middle East Sports Investment Forum and the World Stadiums and Arenas Summit.

Why Riyadh? The Kingdom is becoming the epicenter of the region’s sports and entertainment buildout as it gears up to host the 2034 Fifa World Cup. The government is aiming for the sector to contribute 3% of non-oil GDP by 2030.

OIL — Saudi’s crude exports to China are set to drop sharply to some 13-14 mn barrels in June from around 20 mn barrels in May, Bloomberg reports, citing traders it says are in the know. This is far below the pre‑war average of 40-50 mn barrels per month.

Why? The drop is mainly due to the Hormuz closure, which is forcing Aramco to ship June cargoes to China from the Red Sea’s Yanbu terminal. Aramco’s June official selling prices were also set above other Middle Eastern grades including Murban and Oman, the traders said. This is despite physical-market crude premiums starting to ease recently.

TRAVEL — No more visas to get into Russia: The Saudi-Russian mutual visa waiver officially entered into force yesterday. The agreement — inked at the end of last year on the sidelines of the Saudi-Russian Investment and Business Forum — allows citizens of both countries to stay for up to 90 days for business or tourism, though it notably excludes work, residency, and Hajj.

Data point

14.5 mn — that’s the total cargo tonnage handled by Saudi ports in April, Mawani said on X. Transshipments accounted for 130k TEUs during the month, while livestock volumes stood at over 830k heads. Passenger traffic totaled 70.7k, vehicle throughput reached 53.9k, and container volumes came in at 508.8k.

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The big story abroad

News outlets are following the ups-and-downs of the regional conflict, the latest of which is President Donald Trump’s characterization of the ceasefire as “on massive life support.” Trump called Tehran’s counterproposal to end the monthslong war as “unacceptable,” with the major sticking point being Iran’s stockpile of enriched uranium.

Washington has released 53.3 mn barrels of crude from its reserves to steady oil markets in light of the Iran war, loaning out the supply to nine companies, including ExxonMobil, Trafigura, and Marathon.

One step closer to Warsh’s Fed: Trump’s pick for Fed chair, Kevin Warsh, is one step closer to securing the position, following yesterday’s so-called cloture vote by the Senate. Outgoing chief Jerome ‌Powell’s term ends on Friday.

Meanwhile, in the entertainment business: Sony Music Group acquired the rights to more than 45k songs from alternative asset manager Blackstone under an almost USD 4 bn agreement. The catalogue includes iconic tracks by Journey, Leonard Cohen, and others.