Saudi’s Aramco Sees Profits Soar to $39.5 Billion in Q1 as Global Gas and Oil Prices Surge

Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia, on May 21, 2018. (Ahmed Jadallah/Reuters)

Saudi oil giant Aramco on May 15 posted its highest profits since its initial public offering in 2019 as global gas and oil prices continue to surge in the wake of Russia’s invasion of Ukraine.

The world’s largest oil exporter disclosed in its first-quarter 2022 results that it has made $39.5 billion in earnings in the first quarter of 2022, an 83 percent rise year on year, boosted by increased demand and sharply rising prices.

Aramco, which last week knocked Apple off the top spot as the world’s most valuable company, said its free cash flow rose to $30.6 billion and that it would pay an $18.8 billion dividend and give $4 billion in bonus shares to its shareholders after the record performance.

“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,” Aramco President and CEO Amin H. Nasser said in a statement.

“Energy security is vital and we are investing for the long term, expanding our oil and gas production capacity to meet anticipated demand growth and creating long-term shareholder value by capitalizing on our low lifting cost, low upstream carbon intensity, and integrated downstream business.”

Aramco in March pledged to increase the amount it invests in oil production after it reported that profits more than doubled year on year to $110 billion.

The company also said it would raise its crude oil “maximum sustainable capacity” to 13 million barrels a day by 2027, and potentially raise gas production by more than 50 percent by 2030.

The Saudi oil giant’s earnings come as oil prices increased more than 50 percent last year as a surge in demand outstripped supply when economies across the globe loosened pandemic lockdown restrictions.

Energy companies such as BP and Shell have continued to post soaring profits this year as the price of oil has increased further amid Russian President Vladimir Putin’s military action against Ukraine.

Russia is the third-largest producer of oil globally after the United States and China and has 11 percent of the world’s total market share, according to the United States Energy Information Administration. Western nations have levied a string of sanctions against Russia, which also target its oil exports.

Meanwhile, the surge in gas and oil prices against the backdrop of rising inflation has left citizens paying out more for everyday essentials as well as gasoline, prompting officials to call on major producers to increase output amid fears that energy prices could be further exacerbated because of Russian reliance.

However, the oil ministers of Saudi Arabia and the United Arab Emirates warned on May 10 that their spare energy capacity is decreasing in all energy sectors as key producers shift from investments in fossil fuels and move to renewable energy, pushing oil, diesel, and natural gas to trade at near-record highs.

“The world needs to wake up to an existing reality. The world is running out of energy capacity at all levels,” said Saudi energy minister Prince Abdulaziz bin Salman to Bloomberg on May 10.