RIYADH (AFP) – Oil firm Saudi Aramco yesterday announced profits of USD30.08 billion for the second quarter, a sharp fall from the same period last year when prices surged after the start of the war in Ukraine.
The 38-per-cent year-on-year decline “mainly reflected the impact of lower crude oil prices and weakening refining and chemicals margins”, the largely state-owned company said in a statement published on the Saudi stock exchange.
The decline followed a drop of 19.25 per cent in first-quarter net profit.
Aramco’s CEO Amin Nasser said in a separate statement that “our strong results reflect our resilience and ability to adapt through market cycles”.
The firm’s “mid to long-term view remains unchanged”, he added.
“With a recovery anticipated in the broader global economy, along with increased activity in the aviation sector, ongoing investments in energy projects will be necessary to safeguard energy security.”
Production from the world’s biggest crude exporter was down after Riyadh in April announced cuts of 500,000 barrels per day (bpd), part of a coordinated move with other oil powers to slash supply by more than one million bpd in a bid to prop up prices.
In June, the Saudi Energy Ministry announced a further voluntary cut of one million bpd which took effect in July and has been extended through September.
The kingdom’s daily production is now approximately nine million bpd, far below its reported daily capacity of 12 million bpd.
Aramco is the main source of revenue for Crown Prince Mohammed bin Salman’s sweeping economic and social reform programme known as Vision 2030, which aims to shift the economy away from fossil fuels.
Analysts say the kingdom needs oil to be priced at around USD80 per barrel to balance its budget.
Prices are now above that threshold, a sign that the recent supply cuts are starting to have the desired effect.
The US benchmark West Texas Intermediate crude for September delivery traded yesterday at USD82.54 and European benchmark Brent crude futures were just below USD86.
Following the war in Ukraine in February 2022, oil peaked at more than USD130 per barrel.
