The oil company Saudi Aramco earned 161,000 million in 2022

DUBAI, United Arab Emirates (AP) — Oil giant Saudi Aramco’s profits hit $161 billion last year on the back of 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., said in its annual report that it was its “biggest annual profit as a publicly traded 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 statement. Saudi Aramco CEO and Chairman Amin H. Nasser.

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

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 around $82 a barrel, although prices rose above $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 crude oil prices. 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 promised to achieve carbon neutrality by 2060, like China and Russia, although its plan for doing so is still unclear.

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Jon Gambrell is on Twitter at www.twitter.com/jongambrellAP.