High oil prices help Saudi Aramco earn $88B in first half

Aug 13, 2022, 11:54 AM | Updated: Aug 14, 2022, 7:26 am
FILE - Saudi Aramco engineers and journalists look at the Hawiyah Natural Gas Liquids Recovery Plan...

FILE - Saudi Aramco engineers and journalists look at the Hawiyah Natural Gas Liquids Recovery Plant in Hawiyah, in the Eastern Province of Saudi Arabia on June 28, 2021. Saudi oil company Aramco’s half-year profits peaked just shy of $88 billion for the first half of the year as oil prices remain high globally. The oil and gas company, which is nearly entirely state-owned, said Sunday, Aug. 14, 2022, it also saw a 90% surge in net profits for the second quarter of 2022 compared to the same time last year. (AP Photo/Amr Nabil, File)

(AP Photo/Amr Nabil, File)

DUBAI, United Arab Emirates (AP) — Saudi energy company Aramco said Sunday its profits jumped 90% in the second quarter compared to the same time last year, helping its half-year earnings reach nearly $88 billion. The increase is a boon for the kingdom and the crown prince’s spending power as people around the world pay higher gas prices at the pump while energy companies rake in top earnings.

Major oil companies had a strong quarter with Exxon Mobil booking an unprecedented $17.85 billion profit while Chevron made a record $11.62 billion. The U.K.’s Shell shattered its own profit record.

Aramco’s net profits were helped by second-quarter earnings ending in June that hit $48.4 billion — a figure higher than all of the first six months of 2021, when profits reached just $47 billion. It sets a new quarterly earnings record for Aramco since it first floated around 5% of the company on the Saudi stock market in late 2019.

Its earnings for just this past quarter are almost what Aramco’s full-year profits were in 2020, when demand for oil crashed during pandemic lockdowns. Its half-year earnings of $87.9 billion put Aramco on track to far surpass the full-year earnings of 2019, prior to the pandemic, when profits hit $88 billion.

The company credited the jump to higher crude oil prices and volumes sold, 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 crucial to the kingdom’s stability; when its margins are high, Saudi Arabia’s economic growth reflects that. 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 increasing non-oil revenue, Saudi Arabia continues to rely heavily on crude exports that pay for public sector salaries, generous benefits to citizens and defense spending. Aramco’s earnings also help the prince carry out his Vision 2030 infrastructure goals.

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

Aramco is seen as the key to overhauling the Saudi economy. Its proceeds from the IPO were transferred to the country’s sovereign wealth fund to invest in projects to spur new sectors and generate new jobs for Saudi youth.

Brent crude has been trading at around $100 a barrel, even as OPEC, led by Saudi Arabia, and non-OPEC producers, led by Russia, have been steadily increasing production levels that had been cut during the height of the pandemic. The price of oil rose sharply after Russia invaded Ukraine in February. Prices have dipped below the $100 mark in past weeks amid slowed-down economic growth in China and the U.S.

Aramco President CEO Amin Nasser said he expects oil demand to continue to grow for the rest of the decade, despite current downward economic pressures. OPEC has said it expects world oil demand to rise by around 3 million barrels per day this year with total oil demand to average 100 million barrels a 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, pledge to cut their carbon emissions to avert catastrophic global warming levels.

“The world is calling out for affordable, reliable energy and we are answering that call,” he said, urging greater investments in oil and gas.

“At a time when the world is worrying 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 short video released with the financial results.

Saudi Arabia is currently producing around 10.5 million barrels per day, with much of that exported to Asia and its largest customer, China. The crown prince has said the kingdom’s maximum production capacity is 13 million barrels per day. Aramco says it is working to one day reach that ceiling.

Aramco produces all of Saudi Arabia’s oil and gas with its production limits dictated by the energy ministry.

___

Follow Aya Batrawy on twitter at https://twitter.com/ayaelb

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Arby's - LEHI, UT - OCTOBER 26: Exterior view of an Arby's restaurant on October 26, 2017 in Lehi, ...
Associated Press

Ex-Arby’s manager in Vancouver, Wash. sentenced after urinating in milkshake mix

A former manager at an Arby’s restaurant admitted to possessing child pornography and urinated into a milkshake mix
17 hours ago
Associated Press

Officials: Search for migrants after boat sinks off Keys

KEY WEST, Fla. (AP) — Four Cuban migrants swam to shore in the Florida Keys and three others were rescued from the ocean after their boat sank Wednesday, shortly before Hurricane Ian made landfall in southwestern Florida. But 20 more people might be missing, officials said. The four Cubans reached Stock Island, just east of […]
17 hours ago
FILE - Asunción Ponce, left, marches with fellow members of the United Farm Workers in support of ...
Associated Press

California governor approves farmworker unionization law

SACRAMENTO, Calif. (AP) — A broadly smiling California Gov. Gavin Newsom joined about two dozen jubilant, cheering farmworkers camped outside the state Capitol Wednesday to sign one of the most contentious bills before him this year, reversing course on a measure to help farmworkers unionize after President Joe Biden and Vice President Kamala Harris supported […]
17 hours ago
FILE — Marijuana plants for the adult recreational market are loaded on a tractor for planting at...
Associated Press

900 apply for NY’s first licenses to sell recreational pot

ALBANY, N.Y. (AP) — More than 900 would-be pot shop operators have applied for a chance to open New York state’s first legal dispensaries for recreational marijuana, regulators said Wednesday. The state has said it plans to issue about 150 licenses in this first round, which was open only to people with past pot convictions […]
17 hours ago
Associated Press

At least 6 people wounded in shooting at school in Oakland

OAKLAND, Calif. (AP) — At least six people were wounded in a shooting at a school in Oakland on Wednesday, officials said. The scene of the shooting was “no longer active,” according to Alameda County Sheriff spokesperson Lt. Ray Kelly. Paramedics had transported six patients to hospitals, all with gunshot wounds, according to Oakland Fire […]
17 hours ago
Associated Press

Michigan lawmakers agree on early absentee ballot processing

LANSING, Mich. (AP) — Michigan election officials could begin processing absentee ballots two days before the Nov. 8 election under an agreement lawmakers reached Wednesday in hopes of avoiding delays in counting, with absentee voting expected to remain a popular option. Michigan is one of several key swing states that allows no-excuse mail-in ballots but […]
17 hours ago

Sponsored Articles

Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Swedish Cyberknife 900x506...

June is Men’s Health Month: Here’s Why It’s Important To Speak About Your Health

According to the Centers for Disease Control and Prevention, men in the United States, on average, die five years earlier than women.
...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
High oil prices help Saudi Aramco earn $88B in first half