Saudi Aramco Reports Record Profit as Fossil Fuels Remain ‘Essential’

Oil companies’ earnings closely follow commodity prices, with Exxon Mobil, Chevron and Shell all reporting their highest-ever profits, and Saudi Aramco is no exception. The average price of Brent crude, the international benchmark, rose by about 40 percent to just over $100 a barrel in 2022, compared with the previous year, mirroring the rise in profits.

Saudi Aramco also benefited from higher profits for refined products like diesel and gasoline.

Several factors last year contributed to higher oil prices, including Russia’s war in Ukraine, which has created as yet unrealized fears of oil shortages, and an increase in energy demand as much of the global economy recovered from the pandemic.

The group of oil producing countries, known as OPEC Plus, led by Saudi Arabia and Russia, has also helped keep oil prices robust by restraining production. Brent crude is now selling for about $83 a barrel.

Whereas some of the major Western oil companies have taken a restrained approach to new fossil fuels investment, especially as governments promote electric cars and other ways to reduce carbon emissions, Aramco is spending record sums. Last year, its spending on capital expenditure, which mainly invests in oil and natural gas production, rose by 18 percent to $37.6 billion.

Mr. Nasser reiterated a warning that a failure to invest sufficiently could lead to shortages of oil and elevated prices in the future. “The risks of underinvestment in our industry are real, including contributing to higher energy prices,” he said.

Article source: https://www.nytimes.com/2023/03/12/business/saudi-aramco-record-earnings-profit.html