The oil and gas company Saudi Aramco increased its net profit by 90 percent.
(Photo: AP)
Dubai Rising energy prices around the world are pushing up profits at Saudi Arabian oil company Aramco. The state-controlled company on Sunday reported a 90 percent increase in net income to 181.64 billion riyals for the second quarter, beating analysts’ expectations.
In addition to higher oil prices, this was also due to higher sales volumes and refinery margins. The group assumes that the demand for oil will continue to rise throughout the decade despite the gloomier short-term prospects for the global economy, said Aramco boss Amin Nasser.
Like its competitors, Aramco is benefiting from the fact that oil and natural gas prices reached multi-year highs this year after Western sanctions against the important exporter Russia put further pressure on the already strained world energy market. Fuel manufacturing margins skyrocketed around the world, also boosting the profits of western oil giants like Exxon Mobil, Shell, Total and Chevron.
For Aramco, however, the quarter could mark a high point. While Brent crude averaged $112 a barrel between April and June, it has since fallen below $95 on economic slowdowns in the US and Europe and China’s Covid lockdowns.
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Still, Saudi Arabia, along with other members of OPEC plus, the producer cartel it co-leads with Russia, is increasing production. In the second quarter, the kingdom produced 10.5 million barrels of crude oil per day. It boosted that number to nearly 11 million in July and is under pressure from the US and other major importers to increase production even further, though some analysts doubt the country has much spare capacity.
Aramco stated that the company “continues to work towards increasing maximum sustainable crude oil capacity from 12 million barrels per day to 13 million by 2027.” The company went public in Riyadh in 2019, but is still 98 percent state-owned. Its shares are up 25 percent this year, giving it a market valuation of $2.4 trillion.
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