Saudi Aramco, the world’s largest oil company, announced $161 billion in revenue last year, claiming it was the highest annual profit ever for a publicly traded company. This news drew immediate criticism from activists.
After Russia began its conflict with Ukraine in February 2022, energy prices rose as a result of sanctions that prevented Moscow from selling its oil and natural gas in Western markets. This resulted in the company, officially known as the Saudi Arabian Oil Co., making a monstrous profit.
In order to capitalize on market demand when China enters the global market once again following the relaxation of its coronavirus restrictions, Aramco also plans to raise its output. The Saudi Crown Prince Mohammed bin Salman’s aspirations to build future cityscapes and wean Saudi Arabia off of oil might be funded with the billions needed from this.
Nevertheless, those intentions come despite growing international concerns over how climate change is being accelerated by the burning of fossil fuels. Yet, rising energy costs have already strained ties between Riyadh and Washington and increased inflation globally.
Amin H Nasser, CEO and President of Saudi Aramco, said in a statement that “given that we think oil and gas will remain crucial for the foreseeable future, the risks of underinvestment in our industry are significant” and might lead to increased energy costs.
Earnings increased 46.5 percent in comparison to the company’s $110 billion in results from 2021. In 2020, while the globe was dealing with the worst of the coronavirus pandemic lockdown, travel difficulties, and briefly falling oil prices, Saudi Aramco made $49 billion.
About 11.5 million barrels of crude oil will be produced daily by Aramco in 2022, with a goal of 13 million barrels per day by 2027.
It intends to invest as much as $55 billion in major projects this year to increase that production.
Moreover, Aramco announced a $19.5 billion dividend for the fourth quarter of 2022, which will be paid in the first quarter of this year.
The performance of Aramco, a leading indicator of the global oil market, is consistent with the enormous profits made by other major energy companies like BP, ExxonMobil, and Shell in 2022.
Yet, the $161 billion profit was so large that it eclipsed not only its own prior performance but also previous highs set by Apple, Vodafone, and the US Federal National Mortgage Association, or Fannie Mae.
Benchmark Although it had previously hit above $120 per barrel in June, the price of Brent crude oil is currently about $82 per barrel. Aramco, whose success depends on rising oil prices worldwide, reported a record $42.4 billion profit in the third quarter of 2022 as a result of this increase.
Climate change advocates criticized the huge earnings, especially in light of the fact that the United Nations COP28 climate conference will start this November in the nearby United Arab Emirates.
Like China and Russia, Saudi Arabia has committed to have net-zero carbon emissions by the year 2060, though it is still unclear how it intends to do it. Aramco created a $1.5 billion sustainability fund in October and wants to build a carbon capture and storage facility, according to the company’s quarterly report.
In light of widespread concerns about climate change, Amnesty International Secretary-General Agnès Callamard criticized Aramco’s annual profit.
The sale of fossil fuels, which are the main cause of the climate issue, generated a profit for a firm of more than $161 billion in a single year, she added in a statement.
It is even more alarming because this excess was built up during a global crisis in the cost of living and helped by the rise in energy costs brought on by Russia’s aggressive campaign against Ukraine.
Callamard also pointed out that despite being embroiled in a protracted war in Yemen and repressing dissent, Saudi Arabia continues to be one of the world’s top executioners.
“These unusual revenues, and any future income earned from Aramco, should not be used to pay, try to cover up, or otherwise obscure human rights abuses,” she warned.
