Saudi oil firm Aramco profits skyrocket amid instability

Saudi Arabia's national oil producer on Sunday announced that its profits had leapt by nearly 90% in the second quarter of the year.

The increase comes as fuel prices around the world spiral amid instability caused by Russia's war in Ukraine and a post-pandemic surge in demand.

What were the figures?

Aramco reaped a half-year income of $48.4 billion in profits between April and June this year, compared with $25.5 billion last year.

The company enjoyed a similar surge in profits for the first three months, with the latest figure representing a quarterly record since Aramco was partially floated in 2019.

Aramco — the leading source of income for the kingdom temporarily surpassed Apple as the most valuable company in the world earlier this year. It is currently second in the list.

Half-year-earnings reached nearly $88 billion, a boon for Saudi Arabia and its de facto ruler Crown Prince Mohammed bin Salman. Despite years of efforts to diversify the economy, the Saudi Arabia still relies heavily on oil and gas sales for revenue.

Aramco expects more demand

Aramco President Amin Nasser said the results reflected "an increasing demand for our products," and predicted that the trend would continue.

"While global market volatility and economic uncertainty remain, events during the first half of this year support our view that ongoing investment in our industry is essential — both to help ensure markets remain well supplied and to facilitate an orderly energy transition," said Nasser.

"In fact, we expect oil demand to continue to grow for the rest of the decade, despite downward economic pressures on short-term global forecasts."

Nasser also said the firm had been able to recover quickly from a series of attacks by Yemen's Houthi rebels on its facilities earlier this year.

Drop in price, but still high

Oil prices have fallen from a peak in June by more than $30 per barrel but remain close to $100.

Despite pressure from Western leaders including US President Joe Biden, the OPEC group of oil-producing countries has been raising production only gradually.

The same has been true of non-OPEC producers, led by Russia.

Biden visited Saudi Arabia last month in a trip was that was seen as a climb-down after he previously promised to make the kingdom "pariah" over the killing of Washington Post columnist Jamal Khashoggi.

Saudi Arabia currently produces about 10 million barrels per day, with the crown prince last month saying that maximum production capacity was 13 million barrels.

Its main customer for crude petroleum was China ($24.7 billion in 2020) followed by Japan ($15.1 billion), South Korea ($12.8 billion), India ($11.8 billion) and the United States ($6.6 billion).

rc/jcg (AFP, AP)