Leading oil company Saudi Aramco sees profits rise more than 80 percent in the first three months of 2022. The surge results from the Saudi Arabian Oil Company’s efforts to capitalize on the volatility in oil prices and energy markets due to the ongoing Russia-Ukraine war.
The state-backed oil giant reports a net income of $39.5bn, a significant surge compared to its $21.7bn earnings last year. According to the Saudi oil firm, the surge was due to the sudden increase in downstream margin, crude oil prices, and sold volumes.
Amin Nasser, Chief Executive of Aramco, said that they see that energy security is essential, and they plan to invest in it for the long term. They intend to achieve this by improving oil and gas production capacity to meet global demand.
This is following their solid reports last year as economic activity slowly resumes and demand for hydrocarbons bounces back, thanks to covid restrictions loosening up worldwide.
The rise in net profit started last March after Russia invaded Ukraine. During this time, oil prices skyrocketed to $139 a barrel, and the oil giant reported a 124% increase.
Saudi Aramco overthrew Apple as the world’s most profitable company due to its shares rising to noteworthy levels last week, helped by the increase in oil prices, which pushed the oil firm’s market cap to $2.43 trillion.
Crown Jewel of Saudi Arabia
The oil company is considered the kingdom’s “crown jewel” as it is also a vital source of the government’s revenue. However, it is under security threat in the form of Yemen’s Houthi rebels. As the war in Ukraine continues while Russia invades, the Saudi military coalition is likewise in an ongoing war against the Houthi rebel movement.
Attacks last March by the rebels caused some inconvenient effects on oil production, with the militant group causing damage to some of Aramco’s facilities. Back in 2019, aerial assaults from Houthi on two of the oil giant’s facilities caused a massive drop in oil production.
Last May, Saudi Arabia experienced its fastest economic growth in a decade. The booming oil industry contributed a 9.6 percent increase rate in the first quarter.
The country, also the most significant source of oil, remains adamant against US requests that seem to restrict output. This position may be an attempt to control prices from going up due to the Ukraine-Russia war.