Saudi Oil Company Saudi Aramco Reports Record Profit Exceeding The GDP Of Half The Countries In The World

The Saudi Oil Company Saudi Aramco Recorded A Record Profit Higher Than The GDP Of Several Countries. The Profit Is Nearly Double That Of Last Year And The Reason May Be Linked To The War In Ukraine.

The Saudi oil giant Saudi Aramco exceeded its expectations, breaking its own record with a profit of US$ 48.4 billion in the second quarter of this year. The profit is 90% higher compared to last year and represents the highest gain from the world’s largest energy exporter since its stock market debut three years ago. To give a sense of the record, the figure is greater than the Gross Domestic Product (GDP) of more than half of the countries in the world.

Saudi Aramco Will Keep Its Dividends Unchanged

If it were a nation, the oil company would occupy the 88th position on the World Bank’s ranking, which lists the GDP of 207 countries, last year, specifically between the Democratic Republic of Congo (with US$ 53.9 billion) and Tunisia (with US$ 46.8 billion).

Russia’s invasion of Ukraine resulted in a significant increase in the prices of oil and gas, given that the Russians are among the largest exporters in the world. However, Western countries have committed to reducing their dependence on the country for their energy needs. According to Bloomberg, the numbers from the Saudi oil giant Saudi Aramco represent the largest adjusted quarterly profit of any publicly traded company.

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In addition to record profits that can be compared to the GDP of several countries, the Saudi energy company announced that it will keep its dividends unchanged at US$ 18.8 billion in the third quarter. The company states it will continue to expand its operations to meet demand.

Values In The Oil Company Were Already Rising Before The War

According to Amin Nasser, CEO and president of Saudi Aramco, despite the volatility of the global market and economic uncertainty remaining, events during the first half of 2022 support the company’s view that ongoing investment in its sector is essential, both to help keep markets well supplied and to make the energy transition more orderly.

The oil executive further adds that, in fact, the expectation is that oil prices will continue to rise for the rest of the decade, although there is a decline in economic pressures according to short-term global forecasts.

Oil prices were already rising even before the War in Ukraine, when economies began to recover from the damage caused by the Covid-19 pandemic, and demand outstripped supply.

Governments May Impose Taxes On Oil Purchases

The largest oil companies in the world, such as ExxonMobil, BP, and Chevron, recorded huge profits this year, leading to consecutive calls for governments to impose an extraordinary tax amid a massive increase in the cost of living.

In June, U.S. President Joe Biden stated that Exxon had made more money than God this year. It is worth noting that Saudi Arabia is the largest individual producer in the Organization of the Petroleum Exporting Countries (OPEC), a group represented by the largest oil companies in the world.

Last week, OPEC+, which includes Russia, agreed to slightly expand production in an effort to alleviate high oil prices. However, the most recent increase in production is at a much slower pace compared to recent months. The decision was a blow to world leaders, including the U.S. president, who had called for increased production.