Oil giant Saudi Arabian Oil Co (Saudi Aramco) yesterday unveiled record profit of US$48.4 billion in the second quarter of this year, after Russia’s war in Ukraine and a post-COVID-19 pandemic surge in demand sent crude prices soaring.
Net income leaped 90 percent year-on-year for the world’s biggest oil producer, which clocked its second straight quarterly record after announcing US$39.5 billion for the first quarter.
“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,” Saudi Aramco president and CEO Amin Nasser said.
Photo: Reuters
“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,” he said.
Net income rose 22.7 percent from the first quarter in “strong market conditions,” Saudi Aramco said.
Half-year profit was US$87.9 billion, up from US$47.2 billion in the same period of last year.
The company is using the windfall to reduce debt and invest in a huge expansion of its production capacity, rather than boost payouts to shareholders.
Saudi Aramco paid an US$18.8 billion dividend in the second quarter and is planning to disburse the same amount in the third quarter.
The quarterly profits, the highest since the firm’s flotation in late 2019, beat analyst forecasts of US$46.2 billion.
Saudi Aramco was priced at 40.8 riyals ahead of the Saudi Arabian stock exchange’s opening yesterday.
Saudi Arabia has sought to open up and diversify its oil-reliant economy, especially since Mohammed bin Salman’s appointment as crown prince and de facto ruler in 2017.
Earlier this month, the International Energy Agency said global oil demand would this year rise more than previously forecast, as heat waves and soaring gas prices prompt countries to switch fuels for power generation.
Oil prices have dropped by US$30 per barrel from a peak in June due to growing supplies, but remain close to US$100.
The OPEC group of oil-producing countries has been gradually raising production, despite pressure from Western leaders including US President Joe Biden — who visited Saudi Arabia last month — to pump more.
Biden’s trip was seen as a climbdown after he previously promised to make Saudi Arabia a “pariah” over the killing of Washington Post columnist Jamal Khashoggi by Saudi Arabian agents in Turkey in 2018.
British Prime Minister Boris Johnson also visited Saudi Arabia after the Russian invasion of Ukraine began in February.
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