Dubai, United Arab Emirates (AFP) – Saudi energy company Aramco said on Sunday that its profit jumped 90% in the second quarter compared to the same period last year, helping its half-year profit to nearly $88 billion. The increase is a boon to the kingdom and the crown prince’s purchasing power as people around the world pay higher gas prices At the pump while energy companies reap the highest profits.
The major oil companies had a strong quarter With Exxon Mobil reporting an unprecedented $17.85 billion profit while Chevron posted a record $11.62 billion. UK Shell broke its profit record.
Aramco’s net profit benefited from a profit for the second quarter ending in June of $48.4 billion – a figure higher than all of the first six months of 2021, When profits reached only 47 billion dollars. It is setting a new record for Aramco quarterly profit since it first floated about 5% of the company on the Saudi stock market in late 2019.
Its earnings for the fourth quarter only are roughly what Aramco’s earnings were for the full year in 2020, when oil demand collapsed during pandemic lockdowns. Its semi-annual profit of $87.9 billion put Aramco on track to surpass full-year earnings for 2019, before the pandemic, when profits were $88 billion.
The company attributed the jump to higher crude oil prices and selling volumes, as well as higher refining margins. The vast oil reserves of Saudi Arabia are among the cheapest in the world.
Aramco’s financial resources are critical to the stability of the kingdom. When its margins are high, Saudi Arabia’s economic growth reflects that. As countries around the world struggle with inflation and stagnation, The International Monetary Fund expects the Saudi economy to grow by more than 7.6% this year, the highest growth rate globally.
Despite years of efforts by Crown Prince Mohammed bin Salman to diversify the economy, and some success in increasing non-oil revenues, Saudi Arabia continues to rely heavily on crude oil exports that pay public sector salaries, generous citizen benefits and defense spending. Aramco’s earnings also help the prince implement his Vision 2030 infrastructure goals.
The company will pay $18.8 billion in cash dividends for the second quarter to shareholders, as it has promised since it debuted on the stock market. The higher profits bode well for the Saudi government, which is Aramco’s major shareholder.
Aramco is seen as the key to reforming the Saudi economy. Proceeds from the public offering To the country’s sovereign wealth fund to invest in projects to stimulate new sectors and create new jobs for Saudi youth.
Brent crude is trading at around $100 a barrel, even as OPEC, led by Saudi Arabia, and non-OPEC producers, led by Russia, have steadily increased production levels that were cut off during the height of the epidemic. The price of oil rose sharply after Russia invaded Ukraine in February. Prices have fallen below the $100 mark In the past weeks, amid slowing economic growth in China and the United States
Aramco CEO, Amin Nasser, said he expects oil demand to continue to grow for the rest of the decade, despite the current downward economic pressures. OPEC said it expects global oil demand to rise by about three million barrels per day this year, with average total oil demand reaching 100 million barrels per day.
Nasser said Aramco’s financial results so far this year reflect this growing demand for oil, even with countries around the world, including Saudi Arabia.They pledge to cut carbon emissions to avoid catastrophic levels of global warming.
“The world is calling for reliable and affordable energy and we are responding to that call,” he said, urging increased investments in oil and gas.
“At a time when the world is concerned about energy security, you are investing in the future of our business. Our customers know that whatever happens, Aramco will always stick to it,” Nasser said in a short video released with the financial results.
Saudi Arabia currently produces about 10.5 million barrels per day, a large part of which is exported to Asia and its largest customer, China. The crown prince said the kingdom’s maximum production capacity is 13 million barrels per day. Aramco says it is working one day to reach that ceiling.
Aramco produces all oil and gas in Saudi Arabia within production limits dictated by the Ministry of Energy.
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