DUBAI, United Arab Emirates (AP) –
Oil giant Saudi Aramco said on Sunday it made $161 billion in profit last year.
The firm, officially known as Saudi Arabian Oil Co., said in its annual report that higher crude prices had boosted its profits.
This was announced on the Tadawul stock exchange in Riyadh.
Aramco reported profits of $110 billion in 2021, up from $49 billion in 2020, as the world faces its worst period of lockdown due to the coronavirus pandemic, travel disruptions and a prolonged drop in oil prices.
Benchmark Brent crude is now trading around $82 a barrel, although prices reached above $120 a barrel in June. Aramco, whose fortunes depend on global energy prices, announced a record profit of $42.4 billion in the third quarter of 2022 due to this surge in prices.
Those high prices have further strained relations between the kingdom and the United States, which has traditionally been the security guarantor of the Gulf Arab states amid tensions with Iran. Ahead of midterm elections in November, the kingdom said the Biden administration was trying to delay a decision by OPEC and allies, including Russia, to cut production that could keep gasoline prices low for voters — making public the normally backroom negotiations that usually take place in region
President Joe Biden warned the kingdom that “there will be some consequences for what they’ve done” in terms of oil prices. However, those consequences are yet to be seen as Saudi Arabia and Iran traveled to China on Friday to seal a diplomatic deal. Gasoline prices in the US now average $3.47 a gallon, down about a dollar from last year.
Saudi Arabia’s vast oil resources, located just below the surface of its desert, make it one of the cheapest places in the world to extract crude oil. According to the Institute of International Finance, for every $10 a barrel of oil rises, Saudi Arabia will earn an additional $40 billion a year.
Aramco’s share price on the Tadawul stock exchange in Riyadh before its opening on Sunday was $8.74. That’s down from a high of $11.55 a share last year. However, the current price gives Aramco a valuation of $1.9 trillion, making it the second most valuable company in the world behind only Apple. The government of Saudi Arabia still owns the vast majority of the firm’s shares.
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