Saudi Arabia’s oil-producing company, Aramco, has announced a net income of around 47 billion US dollars (£33.9 billion) for the first half of the year, double what it earned in the same period last year when Covid-19 grounded travel and pummelled global demand for oil.
It puts the company back to where it was before the pandemic struck and sunk earnings to 23.3 billion dollars (£16.8 billion) this time last year.
The company said its strong performance in the second quarter of 2021 “was primarily driven by higher crude oil prices”. Benchmark Brent crude oil was trading at just over 70 dollars a barrel on Friday, up from the 45 dollars a barrel range it hit this time last year.
— Aramco (@Aramco) August 8, 2021
The majority state-owned oil company said net income for the second quarter was 25.46 billion dollars (£18.4 billion) compared with just 6.6 billion dollars (£4.8 billion) last year. This quarter’s figure is slightly higher than the 24.7 billion dollars (£17.8 billion) it earned in the second quarter of 2019, before coronavirus.
Its second-quarter earnings are also an improvement from the first quarter of the year, which raked in 21.7 billion dollars (£15.6 billion).
Aramco’s financial health is crucial to Saudi Arabia’s stability. Despite massive efforts by Crown Prince Mohammed bin Salman to diversify the economy, the kingdom still depends heavily on oil exports to fuel government spending.
The company said it will uphold its commitment to pay out dividends of 18.75 billion dollars (£13.5 billion) for the second quarter as part of its promise to pay 75 billion dollars (£54 billion) in annual dividends. Most of that payout is to the company’s primary shareholder, the Saudi government.
Saudi Arabia has led global efforts by major oil producers to curb output in order to keep prices from crashing as coronavirus uncertainty hits consumer demand for crude.
Under the agreement, the kingdom has been producing between 8 million and 9 million barrels a day since May 2020.