Saudi oil giant Aramco’s first-quarter profits surge 80%

DUBAI (United Arab Emirates)

Saudi Aramco is a major oil producer saidSunday’s profits rose more than 80 percent in the first three months, as the state-backed firm capitalizes on volatility in global energy markets.

The record-breaking first quarter earnings of the company formerly known as Saudi Arabian Oil Co. (which overtook Apple last week as the world’s most valued company) show a net income of US$39.5billion, an increase of $21.7billion from the previous year.

This figure represents the oil industry’s highest quarterly profit ever since 2019, when Saudi Arabia, which holds 98 per cent, listed a fraction of its value on Riyadh’s Tadawul Stock Exchange in what was then a world-record initial public offering.

Aramco’s chief executive stated that the rise in profits was due to rising prices and the kingdom’s increased production. He also cited allies from the OPEC Plus group. He suggested that disruptions caused by the war in Ukraine had highlighted the importance of oil and natural gas companies such as Aramco.

Amin H. Nasser, President and CEO, stated, “Against the backdrop to increased volatility in global market, we remain focused upon helping meet the world’s demand for reliable, affordable, and increasingly sustainable energy.” saidAramco said that it was increasing its maximum production capacity in order to meet the anticipated demand growth.

In March, after Russia invaded Ukraine, oil prices rose to $139 per barrel, but then fell as Russian oil continued flowing and renewed lockdowns hurt China’s demand for hydrocarbons. Brent crude, an international benchmark, traded for more than $111 a barrel on Sunday.

Aramco shares rose 1.85 percent on Sunday after the earnings report. A share costs 41.40 Saudi Rial, or $11.04 at the Tadawul Stock Market. Aramco shares have risen since the beginning of the year. It is now the most valuable company in the world, with a market capital of approximately $2.43 trillion.

The oil group saidIt maintained its $18.8 million cash dividend for fourth quarter last year, making it one of the largest full-year cash dividends anywhere in the world. The Saudi government relies on this payment for its revenue.

Gearing, which is defined by the company as the extent to which operations are financed through debt, fell from 14% at the end last year to 8% in the first quarter.

After years of slow growth and relatively low prices, the state-backed company saw strong quarterly results.

Saudi Arabia has enjoyed a welcome boost in its economy due to skyrocketing oil prices.

According to statistics agency, Saudi Arabia, the top oil exporter in the world and OPEC’s leader, saw its first quarter of 2011 record economic growth. Its gross domestic product grew 9.6% compared to last year. According to the International Monetary Fund, the kingdom’s economy will grow 7.6 percent this year.