Saudi energy company Aramco said on Sunday that its profit jumped 90% in the second quarter compared to the same period last year, bringing its half-year earnings to nearly $88 billion.

The increase is a boon to the spending power of the state and the Crown Prince as people around the world pay higher gas prices at the pump while energy companies top income growth.

Aramco’s net profit was helped by strong earnings for the second quarter ended June, which stood at $48.4 billion — higher than the first six months of 2021, when profits jumped to just $47 billion. This sets a new quarterly earnings record for Aramco since it first floated about 5% of the company in the Saudi stock market in late 2019.

Its earnings for this past quarter are roughly on par with Aramco’s full-year profits in 2020, when oil demand crashed during the pandemic. Its half-year earnings of $87.9 billion put Aramco on track to surpass 2019 full-year earnings before the pandemic, when profits stood at $88 billion.

The company attributed this jump to higher crude oil prices and sales volume as well as higher refining margins. Saudi Arabia’s vast oil reserves are among the cheapest to produce in the world.

Aramco’s finances are critical to the state’s stability; When its margins are high, Saudi Arabia’s economic growth reflects this. As countries around the world grapple with inflation and recession, the International Monetary Fund projects the Saudi economy will grow by more than 7.6% this year, the highest globally.

Despite years of efforts by Crown Prince Mohammed bin Salman to diversify the economy and some success in non-oil revenues, Saudi Arabia continues to rely heavily on crude exports that provide public sector salaries, generous benefits to civilians and defense spending. pays for. Aramco’s earnings also help Prince meet his Vision 2030 infrastructure goals.

The company will pay shareholders a dividend of $18.8 billion for the second quarter, as it has promised since its debut on the stock market. Higher profits bodes well for the Saudi government, which is Aramco’s main shareholder.

Aramco is seen as the key to change in the Saudi economy. Its proceeds from the IPO were transferred to the country’s Sovereign Wealth Fund to invest in projects to boost new sectors and create new jobs for Saudi youth.

Brent crude is trading at around $100 a barrel, even as OPEC led by Saudi Arabia and non-OPEC producers led by Russia continue to increase production levels that cut during the height of the pandemic. was done. Oil prices have risen sharply since Russia’s attack on Ukraine in February. China and US Prices have dropped below the $100 mark in the past weeks amid slow economic growth in the U.S.

Aramco’s chairman and CEO Amin Nasser said he expects oil demand to continue to grow for the rest of the decade despite current economic pressures. OPEC has said that it expects world oil demand to increase by about 3 million barrels per day this year and total oil demand will average 100 million barrels per day.

Nasser said Aramco’s financial results so far this year reflect this increased demand for oil, even as countries around the world, including Saudi Arabia, have reduced their carbon emissions to stem catastrophic global warming levels. Decided to cut

Urging more investment in oil and gas, he said, “The world is demanding cheap, reliable energy and we are answering that call.”

“At a time when the world is concerned about energy security, you are investing in the future of our business. Our customers know that whatever happens, Aramco will always deliver,” Nasser said in a release accompanying the financial results. Said in short video.

Saudi Arabia is currently producing about 10.5 million barrels per day, much of which is exported to Asia and its biggest customer, China. The Crown Prince has stated that the state has a maximum production capacity of 13 million barrels per day. Aramco says it is working one day to reach that limit.

Aramco produces all of Saudi Arabia’s oil and gas with its production limits set by the Ministry of Energy.

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