Oil giant Saudi Aramco said on Sunday that its second-quarter profit was up 90% from the same period last year. $48.2 billionIt’s the latest energy producer to report significant earnings against the backdrop of soaring oil prices.
Saudi Arabia’s state-owned oil company Aramco said earnings reflected rising demand for crude oil and higher refining profits. And the state-owned company predicted that demand for oil would continue to grow over the rest of the decade.
The company is benefiting from a growing need for energy as economic activity around the world rebounds after the coronavirus pandemic weakened demand.
But oil producers are also benefiting from a surge in prices following Russia’s invasion of Ukraine in February.
From late February through June, oil prices rose more than 36% to nearly $120 a barrel. This is partly due to Western sanctions used to punish Russia. In recent weeks, major oil companies such as ExxonMobil, Chevron, Shell, BP and Total Energy have often posted record-breaking profits.
Rising oil prices led to a sharp rise in gas pumps, briefly pushing the average price above $5 per gallon in the United States.
Oil prices have fallen since June, with international benchmark Brent crude hitting $98 a barrel on Friday and gas averaging below $4 a gallon in the United States. However, prices remain relatively high, with Brent crude at around 61 barrels a year ago. There are also growing concerns that major oil producers are nearing their production limits.
Aramco Chief Executive Amin H. Nasser appeared to address these concerns in a company statement on Sunday.
“While global market volatility and economic uncertainty remain, the events of the first half of this year confirm our view that continued investment in the industry is essential,” Nasser said. said.
He said Aramco’s capital spending program increased 25% in the latest quarter to $9.4 billion, the largest in its history. “Our approach is to invest in the reliable energy and petrochemicals that the world needs,” he said, also pursuing investments in renewable energy, including hydrogen.
Aramco said it would pay a dividend of $18.8 billion in the third quarter, unchanged from the previous quarter. Most of the money will go to the Saudi government, which owns nearly all of the company’s shares with a market value of well over $2 trillion.