Adnoc Gas said the closure of the Strait of Hormuz will hit its full-year net profit despite higher prices helping to offset lost sales once the waterway opens up.
The Abu Dhabi-owned gas company said Tuesday that it anticipates a hit to second-quarter net income between $400 million and $600 million due to the strait’s closure. Adnoc’s forecast assumes shipping operations return to normal prior to the end of the quarter.
The Strait of Hormuz has been largely impassable since the conflict started in late February. Iranian threats to attack ships and a subsequent blockade by the U.S. has resulted in a major energy supply shock. Talks on a peace agreement that could facilitate the reopening of Hormuz continue but are fragile. President Trump said Monday that the current cease-fire with Iran is “on life support.”
Even once the strait is open, getting cargoes flowing depends on ships being in the right place—a logistical feat that could take weeks. Two-thirds of Adnoc’s sales volumes are to domestic customers and comprise gas products. The remainder is exported through the Strait to international customers and is made up of liquefied petroleum gas, liquefied natural gas, and naphtha.
On the assumption that the waterway is open for the second half of the year, Adnoc expects higher LNG and LPG prices will help offset deferred volumes.
As a result of the disruption, Adnoc sees full-year 2026 net income between $3.5 billion and $4.0 billion compared with the record $5.2 billion it reported last year.
For the first quarter, Adnoc reported a 15% on-year fall in net income to $1.08 billion. Despite the conflict, the company backed its 2026 dividend outlook and its policy of 5% annual dividend growth through 2030. It announced a quarterly dividend of $941 million.
The company also backed its long-term earnings before interest, taxes, depreciation and amortization ambition of more than 40% growth from 2023 through 2029.
Write to Adam Whittaker at adam.whittaker@wsj.com
