DUBAI, United Arab Emirates — Oil giant Saudi Aramco mentioned Sunday it earned a $161 billion benefit final yr, attributing its income to raised crude oil costs.
The company, recognized officially because the Saudi Arabian Oil Co., mentioned in its annual document that the benefit represented “its highest annual profits as a listed company.”
“Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real — including contributing to higher energy prices,” Saudi Aramco CEO and President Amin H. Nasser said in a statement.
Nasser said Aramco would spend $37.6 billion to expand its production capacity.
Aramco also declared a dividend of $19.5 billion for the fourth quarter of 2022, to be paid in the first quarter of this year.
In 2021, Aramco declared profits of $110 billion, as compared to $49 billion in 2020 when the world faced the worst of the coronavirus pandemic lockdown, travel disruptions and oil prices briefly going negative.
Benchmark Brent crude oil now trades around $82 a barrel, though prices had reached over $120 a barrel back in June. Aramco, whose fortunes hinge on global energy prices, announced a record $42.4 billion profit in the third quarter of 2022 off the back of that price spike.
Those high prices have further strained ties between the kingdom and the United States, traditionally a security guarantor among the Gulf Arab states amid tensions with Iran. Before the midterm elections in November, the kingdom said the Biden administration sought to delay a decision by OPEC and allies including Russia to cut production that could have kept gasoline prices lower for voters — making public the typically behind-the-scenes negotiations common in the region.
President Joe Biden had warned the kingdom that “there’s going to be some consequences for what they’ve done” in phrases of oil costs. However, the ones penalties haven’t begun to be observed as Saudi Arabia and Iran went to China to strike a diplomatic deal Friday. U.S. gas costs now stand on moderate at $3.47 a gallon, down with reference to a greenback from final yr.
Saudi Arabia’s huge oil sources, situated with regards to the skin of its desolate tract expanse, make it one of the arena’s least pricey puts to provide crude. For each $10 upward thrust in the associated fee of a barrel of oil, Saudi Arabia stands to make an extra $40 billion a yr, in step with the Institute of International Finance.
Shares in Aramco stood at $8.74 on Riyadh’s Tadawul inventory trade sooner than it opened Sunday. That’s down from a prime of $11.55 a percentage in the final yr. However, that present worth nonetheless provides Aramco a valuation of $1.9 trillion — making it the arena’s second-most precious corporate at the back of best Apple. The Saudi executive nonetheless owns the overwhelming majority of the company’s stocks.
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Follow Jon Gambrell on Twitter at www.twitter.com/jongambrellAP.
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