Staggering Oil Prices Boost Saudi Aramco's Profit by 90%

The Saudi oil producer reported earnings of 48.2 billion during the previous quarter, making it the most recent energy major to report enormous profits after the spike in the price of crude oil that Russia's invasion of Ukraine caused in February.

The world's largest oil producer, the state-owned Saudi Aramco, said on Sunday that its earnings for the second quarter increased by 90 percent compared to the same time a year earlier, reaching a total of $48.2 billion. It is the latest energy firm to post bountiful profits as a result of a jump in the price of oil, which has been the primary driver of this trend.

Aramco, the Saudi Arabian national oil firm, said that its results reflected greater demand for crude and better income from the refining process. In addition, the government controls firm forecasted that the oil demand would continue to rise during the remainder of the decade.

Following the coronavirus epidemic, there has been a general uptick in economic activity worldwide, resulting in a higher need for energy. The firm has profited from this increase in demand.

However, oil producers are also benefiting from the jump in prices that followed Russia's invasion of Ukraine in February. This surge in prices led to a significant increase in oil prices.

Between the end of February and the beginning of June, crude oil prices increased by more than 36 percent, reaching almost $120 per barrel. One factor that contributed to this rise was the imposition of sanctions by the West on Russia. In recent weeks, major oil firms such as Exxon Mobil, Chevron, Shell, BP, and TotalEnergies have reported enormous profits, frequently setting records for themselves in the process.

The increased cost of petroleum caused significant price hikes at the pump. The national average cost of a gallon of gas in the United States momentarily reached more than $5 at one point.

Since June, the price of oil has been on a downward trend, with Brent crude, the worldwide benchmark, trading around $98 per barrel on Friday and the average price of a gallon of petrol in the United States dropping below $4. However, prices have remained relatively high (a barrel of Brent traded for around $61 a year ago), and there are rising fears that big oil producers are getting close to reaching a limit in how much they can supply.

In a statement released by Aramco on Sunday, Chief Executive Amin H. Nasser seemed to address some of the concerns raised.

Mr. Nasser said that despite the continued volatility of global markets and economic uncertainties, the events during the first half of this year support the notion that continuous investment in our business is necessary.

He said that Aramco's current capital investment program was the highest in the company's history. This program saw a 25 percent rise in its most recent quarter, bringing the total to $9.4 billion. He said, "our strategy is to invest in the dependable energy and petrochemicals the world needs," while simultaneously pursuing investments in renewable energy, including hydrogen. "Our approach is to invest in the energy and petrochemicals the world needs."

Aramco said it would maintain its quarterly dividend payment at $18.8 billion as it did in the previous quarter. The Saudi government, which already owns virtually all of the business's shares and has a market value of well over $2 trillion, will get the majority of the funds from the sale of the corporation.

                           Saudi Aramco Profit Surges to $48.4 Billion