Saudi oil giant Aramco’s first-quarter profits surge 80%

DUBAI, United Arab Emirates — Oil giant Saudi Aramco said Sunday its profits soared more than 80% in the first three months of the year, as the state-backed company cashes in on the volatility in global energy markets and surging oil prices following Russia’s invasion of Ukraine.

The bumper first-quarter earnings by the firm formally known as the Saudi Arabian Oil Co., which overtook Apple as the world’s most valuable company last week, show a record net income of $39.5 billion, up from $21.7 billion during the same period last year.

The figure marks the oil group’s highest quarterly profit since 2019, when the Saudi government, which owns 98% of the company, listed a sliver of its worth on Riyadh’s Tadawul stock exchange in what was then the world’s largest-ever initial public offering. Aramco’s chief executives stated that the rise in profits was due to rising prices and the kingdom’s increased production. He also cited OPEC Plus allies. He suggested that the disruption caused by the war in Ukraine had highlighted the importance of oil and gas companies such as Aramco.

“Against the backdrop of increased volatility in global markets, we remain focused on helping meet the world’s demand for energy that is reliable, affordable and increasingly sustainable,” President and CEO Amin H. Nasser said, adding that Aramco was in the midst of increasing its maximum production capacity to meet anticipated demand growth.

Oil prices rallied to a 14-year high of $139 a barrel in March immediately after Russia’s invasion of Ukraine, although later receded as Russian oil continued to flow and renewed lockdowns hurt demand for hydrocarbons in China, a top importer. International benchmark Brent crude traded over $111 a barrel Sunday.

Shares of Aramco jumped 1. 85% on Sunday on the earnings report, with a share costing 41. 40 Saudi riyals, or $11. 04 on the Tadawul stock market. Aramco shares have risen since the beginning of the year. It is now the world’s most valued company with a market capital of $2. 43 trillion.

The oil group said it maintained its $18.8 billion cash dividend for the fourth quarter of last year — completing one of the biggest full-year cash dividends in the world. This payment is a key source of revenue to the Saudi government.

Gearing, which the company defines as the degree to which its operations are financed by debt, dropped from 14% at the end of last year to 8% in the first quarter. The strong quarterly results are due to a resurgent economy and the relaxation of global Coronavirus restrictions. This was after record-breaking annual results last year for the state-backed firm after years of slow growth and low prices. The skyrocketing oil prices have given the Saudi economy a welcome boost.

Saudi Arabia, the world’s largest oil exporter and OPEC de facto leader, saw its first quarter of 2011 record economic growth. Its gross domestic product grew 9.6% compared with the same period last years, according to its statistics agency. According to the International Monetary Fund, the kingdom’s economy will grow 7.6% this year.