AlJazira Capital Expects 'Robust' Refining Margins to Bolster Aramco's Q3 Downstream Performance

01:08 AM EDT, 10/22/2026 (MT Newswires) -- AlJazira Capital expects the downstream segment of Saudi Arabian Oil Co (SASE:2222), d/b/a Saudi Aramco, to sustain its growth momentum in the third quarter, as "robust" refining margins help offset volume challenges. In a third-quarter forecast note published Wednesday, the research firm said it expects Aramco's downstream revenue to rise 3.6% quarter over quarter to 334.8 billion Saudi riyals in the three months ended Sept. 30. For the group as a whole, third-quarter net income after minority is estimated at 113.6 billion riyals, up 16.8% year over year and 6.5% lower on a quarterly basis. "Revenue is forecasted at SAR 530.0bn (+26.8% Y/Y, +1.6% Q/Q). The upstream revenue is expected to fall 1.7% Q/Q due to an estimated 13.3% Q/Q decline in realized oil prices (average Brent crude prices decreased 5.9% Q/Q). However, sales volumes (crude oil: ~+1.0 mbpd Q/Q; hydrocarbon: ~ +1.4 mboed Q/Q) are expected to recover with an improvement in passage of shipments through Strait of Hormuz and exports reaching close to pre-war level," analysts added. Aramco's third-quarter EBIT margin is expected to fall to 40% from an adjusted EBIT margin of 41.7% in the previous quarter. For full-year 2026, the Saudi Arabian state-owned oil giant's topline is projected to grow 24.3% year over year to 2.08 billion Saudi riyals, while its net income is expected to rise 40.2% to 488 billion riyals. Average crude prices for 2026 are expected to rise 34% year on year, buoyed by sustained geopolitical risk premiums. "Although Aramco demonstrated flexibility to divert exports from east to west coast, recent escalation and attacks particularly on Aramco's facilities remain major risk. On the other hand, easing shipment flow through Strait of Hormuz is a positive sign that it will help maintain healthy level of sales volume," the note said. Against this backdrop, AlJazira Capital reiterated its overweight rating and price target of 29.6 riyals on the stock. Saudi Aramco is scheduled to publish its third-quarter results on Nov. 3.