Energy giant Saudi Aramco says its 2021 net profit soared by more than 120 percent due to higher crude oil prices, as global economic growth recovered from a pandemic induced downturn.
The announcement came on Sunday hours after Yemen’s Houthi rebels – against whom Saudi Arabia leads a military coalition – targeted several locations, including Aramco facilities, in cross-border armed drone attacks.
Aramco, Saudi Arabia’s cash cow, did not say if the attacks caused any damage.
“Aramco’s net income increased by 124 percent to $110bn in 2021, compared to $49bn in 2020,” the company said in a statement.
Aramco achieved a net income of $88.2bn in 2019 before the coronavirus pandemic hit global markets, resulting in huge losses for the oil and aviation sectors, among others.
A strong rebound last year saw oil prices recover from their 2020 lows, and they have soared to highs not seen since 2014 this year, amid global supply shortages and Russia’s invasion of Ukraine.
Aramco floated 1.7 percent of its shares on the Saudi bourse in December 2019, generating $29.4bn in the world’s biggest initial public offering.
“Our strong results are a testament to our financial discipline, flexibility through evolving market conditions and steadfast focus on our long-term growth strategy,” Aramco President and CEO Amin Nasser said in a statement.
“Although economic conditions have improved considerably, the outlook remains uncertain due to various macroeconomic and geopolitical factors,” he said.
“But our investment plan aims to tap into rising long-term demand for reliable, affordable and ever more secure and sustainable energy,” he added.
“We recognise that energy security is paramount for billions of people around the world, which is why we continue to make progress on increasing our crude oil production capacity, executing our gas expansion program and increasing our liquids to chemicals capacity.”
Diversification of the economy
Since Mohammed bin Salman’s appointment as crown prince in 2017, Saudi Arabia has sought to diversify its oil-dominated economy.
In February, the kingdom – one of the world’s top crude exporters – moved 4 percent of Aramco shares worth $80bn to the country’s sovereign wealth fund.
The transfer was also a sign that Saudi Arabia wants to further open up the oil giant and “crown jewel” of the Saudi economy, the Arab world’s largest.
The crown prince said last year that Aramco was in talks to sell a 1 percent stake to a foreign energy giant.
Brent crude is currently selling at more than $100 per barrel – in part due to Russia’s invasion of Ukraine.
Russia is the world’s largest producer of gas and one of the biggest oil producers and is grappling with mounting Western sanctions.
Oil-rich Gulf countries, including Saudi Arabia, have so far resisted Western pressure to raise oil output to rein in prices, stressing their commitment to the OPEC+ alliance of oil producers, which Riyadh and Moscow lead.