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Saudi Aramco's profits shoot up 90% to another record as the energy crisis sends oil prices soaring

Mohammad bin Salman king salman
Saudi Aramco raked in a record-breaking $48.4 billion in profit last quarter.Saudi Press Agency via AP
  • Saudi Arabia's state oil company has posted a 90% jump in quarterly profits as oil prices soar.

  • Saudi Aramco made $48.4 billion in the second quarter, nearly as much as the five biggest western energy majors combined.

  • Crude prices have risen significantly this year as Russia's invasion of Ukraine squeezes commodities.

Saudi Aramco has posted an eye-watering 90% jump in quarterly profit, notching another record as oil prices soar during the energy crisis.

Saudi Arabia's state oil and gas company pulled in $48.4 billion in the second quarter of 2022, according to its earnings report published Sunday. That's up from $25.5 billion from the same period last year and above analyst expectations for $46.2 billion.

Aramco has benefited from surging oil prices during a global energy crisis that has been intensified by western sanctions imposed on Russia over its invasion of Ukraine. Brent crude has climbed over 21% in 2022 so far, while WTI crude has jumped more than 17%.

The state-owned energy major's CEO Amin H. Nasser said he does not expect oil demand to fall, even though rises in gasoline prices and the risk of a recession has led to some fears of demand destruction.

"Our record second-quarter results reflect increasing demand for our products — particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry," Nasser said in Aramco's earnings report.

"In fact, we expect oil demand to continue to grow for the rest of the decade, despite downward economic pressures on short-term global forecasts."

Last week, the IEA lifted its global oil demand forecast for 2022, as rocketing prices for natural gas and electricity prompt industries to switch to oil for power generation.

Aramco's profit — which equates to about half-a-billion dollars earned a day — its its highest since it listed in 2019, outstripping its previous record of $39.5 billion for the first three months of 2022. But Aramco still left its dividend unchanged at $18.8 billion as it invests in expanding production.

It also almost matched the total second-quarter net income for the five largest Western oil companies together. BP, Chevron, ExxonMobil, Shell, and TotalEnergies made a combined $51 billion over the same period.

Those companies have faced some criticism, with record-breaking profits coinciding with an energy crisis which has left consumers grappling with soaring fuel costs.

US president Joe Biden blasted Exxon for making 'more money than God' earlier this year, while the UK Labour Party has proposed extending a key windfall tax to oil and gas companies after BP and Shell posted record-breaking profits.

Aramco's stock rose 2.38% on Monday, trading at 40.80 Saudi Arabian riyals ($10.87).

Read more: Energy traders are making a killing exporting US natural gas to Europe as prices soar - with some single shipments bringing in $200 million

Read the original article on Business Insider