Oil company Saudi Aramco made a profit of $161 billion in 2022

Oil giant Saudi Aramco’s profits hit $161 billion last year due to rising crude oil prices, the company reported on Sunday. This is a record result for an energy company crucial to the kingdom’s economy.

The company, officially known as Saudi Arabian Oil Co. indicated in its annual report that it was “its biggest annual profits as a listed company”. Energy prices rose after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Russian oil and gas to Western markets.

Aramco also hopes to increase production to tap into market demand, which would help raise the billions needed to pay for Crown Prince Mohammed bin Salman’s plans to develop futuristic cities and reduce the country’s dependence on oil.

However, the international community is increasingly concerned that the burning of fossil fuels is accelerating climate change.

“Given that we expect oil and gas to remain essential for the foreseeable future, the risk of divesting from our industry is real, and includes contributing to higher energy prices,” said in a press release the CEO and president of the Saudi Aramco company, Amin H. Nasser.

The bone Profits rose 46.5% from $110 billion in 2021. The company earned $49 trillion in 2020as the world was at the height of the coronavirus pandemic-related lockdowns and crude prices briefly fell.

Aramco estimated its crude production at around 11.5 million barrels per day in 2022 and said it expects to reach 13 million barrels per day by 2027.

To boost that output, it planned to spend up to $55 billion on projects this year.

Aramco also announced a $19.5 billion dividend for the fourth quarter of 2022, which will be paid in the first quarter of this year.

Benchmark Brent crude was now trading at around $82 per barrel although the prices surpassed $102 a barrel in June. Aramco, whose revenue depends on global energy prices, reported a record $42.4 billion profit in the third quarter of 2022 after the price spike.

The higher prices have further strained relations between the kingdom and the United States, a traditional guarantor of security in Persian Gulf states, amid tensions with Iran. However, ahead of the U.S. midterm elections in November, Riyadh said Washington had asked to postpone a decision by OPEC and its allies, including Russia, on a production cut to maintain oil prices. gasoline lower for voters. This revelation exposed regional negotiations that are normally kept private.

US President Joe Biden has warned the kingdom that “there will be consequences for what they have done” in terms of the price of crude oil. However, these consequences have not yet occurred. Saudi Arabia and Iran visited China on Friday to reach a diplomatic agreement. Meanwhile, US gasoline prices are now averaging $3.47 a gallon, just a dollar lower than last year.

For the kingdom, rising oil prices could help fund Prince Mohammed’s dreams, such as his futuristic desert city, a 500 billion year old project called Neom. However, they are also coming up against fears from climate change activists, particularly in the run-up to the United Nations climate talks, which begin their COP28 summit in November in the neighboring United Arab Emirates.

Saudi Arabia has pledged to achieve carbon neutrality by 2060, like China and Russia, though its plan to get there is still unclear..

Amnesty International (AI) on Sunday called Aramco’s net profits “scandalous”.

“It is outrageous for a company to make more than US$161,000 million in profit in a single year from the sale of fossil fuels, the main driver of the climate crisis said AI Secretary General Agnès Callamard in a statement.

He pointed out that it is even more “shocking” that this surplus “was amassed during a global cost-of-living crisis and aided by rising energy prices resulting from Russia’s war of aggression against Ukraine”.

In this regard, Callamard said that “it is time for Saudi Arabia to act in the interest of humanity and support the phasing out of the fossil fuel industry which is essential to prevent further climate damage.

Oil and gas produced by Aramco are estimated to be responsible for more than 4% of global greenhouse gas emissions since 1965 and, according to one study, they accounted for about 4.8% of all global greenhouse gas emissions in 2018, the most of any oil and gas company, AI said.