RBC Capital Markets updated its model for Saudi Arabian Oil Co (SASE:2222), d/b/a Saudi Aramco, adjusting earnings forecasts before the Saudi state-owned oil giant publishes its second-quarter earnings on Aug. 4.
"We incorporate recent [Organisation of the Petroleum Exporting Countries, or OPEC,] production data into the upstream, which indicates Saudi Arabian crude production at 6.7 [million barrels per day] in 2Q26. Weaker production into 2Q is partly offset by very strong [realizations]. Given the re-closure of the Strait of Hormuz, we also lower our production figures for the rest of the year slightly, which brings our FY26 EPS down slightly (-3%). In the downstream, we expect margins to remain elevated given continued disruptions to the global refining complex, and we adjust our previously conservative refining margin assumptions for the rest of FY26 and FY27. This drives most of our FY27 EPS upgrade (+11%)," according to a Tuesday note.
The research firm expects the earnings call to focus on quarterly realizations, Strait of Hormuz transit updates, alternative export routes, and potential pipeline deals with other Gulf nations. Analysts also expect the recent geopolitical tensions to heighten security concerns about the Yanbu terminal, which has served as a critical export route for the country in recent months.
RBC maintained the stock's sector perform rating, with a price target of 34 Saudi riyals.