Saudi Aramco: Oil giant records $48.4bn quarterly profit

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Image Source: PBS

With a $48.4 billion (£39.8 billion) profit for the second quarter of 2022, Saudi Arabia’s largest oil company, Aramco, smashed its record.

The largest revenue for the world’s top energy exporter since its public listing three years ago represents a gain of 90% year over year.

The invasion of Ukraine by Russia has caused gas and oil prices to soar. Russia is one of the major exporters in the world, but Western countries have vowed to reduce their reliance on it for their energy demands.

Bloomberg claims that the result from the Saudi oil giant is the highest quarterly adjusted profit ever recorded by a publicly traded corporation.

Along with reporting record profits, the state-owned Saudi energy behemoth also disclosed that it would maintain its third-quarter dividend at $18.8 billion.

The business declared that it would keep growing to meet demand. Amin Nasser, president and chief executive of Aramco, acknowledged that despite continued global market volatility and economic unpredictability, the company’s belief that ongoing investment in the oil industry is crucial to helping ensure markets are well-supplied and to facilitate a peaceful energy transition is supported by events in the first half of this year.

In fact, he continued, “despite downward economic pressures on short-term global predictions, we expect oil consumption to continue to expand for the rest of the decade.”

Before the Ukraine conflict, oil prices were already on the rise as demand outstripped supply and countries began to recover from the Covid-19 outbreak.

ExxonMobil, Chevron, and BP, three of the largest oil producers in the world, all reported enormous earnings this year, which has increased calls for governments to enact a windfall tax in response to an alarming spike in living expenses.

Read Also: OPEC agrees to produce more oil 

US President Joe Biden claimed in June that Exxon had “more money than God this year.”

In Opec, a grouping of the major oil producers in the world, Saudi Arabia is the greatest individual producer.

In an effort to lower the high price of oil, Opec+ decided to increase production marginally last week. However, the most recent production output increase has been substantially slower compared to the former months.

Read Also: China overtakes Saudi Arabia to become the biggest importer of Russian oil 

Leaders who had urged for increased production, including Mr. Biden, were disappointed by the decision.

A favorable quarter for the Aramco and other oil companies

This year’s first half saw a rise in the number of energy companies. The market turmoil caused by Russia’s invasion of Ukraine drove oil prices beyond $100 per barrel and skyrocketed refining profits, while Aramco benefited from both high production and sales prices. In the meantime, most regions of the world saw a recovery in demand following the coronavirus pandemic. As a result, companies like Shell Plc and Exxon Mobil Corp. reported record earnings in the second quarter.