Saudi Aramco’s net profit increased by 82 percent infirst quarter due to high oil prices

Saudi Aramco, the state-owned oil giant, announced an almost 82 percent increase in first-quarter net profit on Sunday, generally in line with expert expectations, aided by high oil prices.

Aramco, the world’s most valuable business, recorded a net income of $39.5 billion for the quarter ended March 31, up from $21.7 billion the previous year.

According to a median estimate from 12 experts offered by the firm, the world’s largest oil exporter was expected to post a net income of $38.5 billion.

Aramco, which went public in 2019 with the sale of a 1.7 percent stake to the Saudi public and regional institutions, said its earnings were the best in any quarter since it went public, driven by higher crude prices, higher volumes sold, and greater downstream margins.

Earnings at major energy corporations such as BP and Shell have grown to their greatest level in at least a decade as commodity prices rise, despite the fact that many of them are incurring substantial write-downs from fleeing Russia.

Brent crude prices ended the first quarter up nearly 70% to $107.91 per barrel from the end of March 2021.

This month, OPEC+ agreed to another slight hike in its monthly oil output quota, arguing that it could not be blamed for Russian supply interruptions that have driven up prices. It also stated that China’s coronavirus lockdowns were harming the demand outlook.

‘Our estimate is that Brent will end up lower in the second part of the year,’ Yousef Husseini, associate director for equity research at EFG Hermes, said.

In line with market expectations, the firm declared a dividend of $18.8 billion to be paid in the second quarter, and approved the distribution of one bonus share for every ten shares held in the company.

Aramco reported increased downstream profitability in the first quarter and plans to expand its downstream operations.

‘Our strategic downstream expansion moved further in both Asia and Europe during the first quarter, and we continue to discover possibilities that match our growth objectives,’ Aramco CEO Amin Nasser said in a statement.

The company’s stock has increased 37 percent since the beginning of the year, surpassing the Saudi index, which is up about 14 percent.