Saudi Arabian Oil Co., commonly known as Aramco, said its net income surged 82% to $39.5 billion in the first three months of 2022. Last week, it overtook Apple Inc. as the world’s most valuable company, with its market value rising to $2.4 trillion.
Aramco’s soaring profits offer an example of how the Ukraine invasion and rising oil prices have boosted the fortunes of petrostates such as Saudi Arabia. With oil prices rising as high as $139 a barrel in recent months and consistently above $100, Saudi Arabia has seen its fastest economic growth in a decade.
Saudi Arabia’s gross domestic product in the first quarter expanded 9.6% from a year earlier, according to the kingdom’s statistics authority. London-based consulting firm Capital Economics estimates the Saudi economy will grow around 10% this year. That is far stronger than the 6.3% growth currently expected by the consensus, it said.
Though the kingdom is trying to diversify away from oil, Aramco remains the engine of its economy. The company pumped an average of 10.2 million barrels a day between January and March, the most of any company in the world.
Aramco kept its quarterly dividend, a vital revenue source for the Saudi government, unchanged at $18.8 billion and approved the distribution of one bonus share for every 10 shares held in the company.
The Saudi government, with a stake of more than 94% in Aramco, has sought to monetize the country’s massive oil assets and use the proceeds to invest in industries outside of oil as part of Crown Prince Mohammed bin Salman’s plan to restructure the economy by 2030.
To help meet that goal, Prince Mohammed has tasked the kingdom’s Public Investment Fund to invest in companies and industries untethered to hydrocarbons. The government also transferred the $29.4 billion it raised from Aramco’s initial public offering on the Saudi stock exchange in 2019 to the PIF to deploy.
Earlier this year, the Saudi government said it transferred Aramco shares worth about $80 billion to the PIF as part of efforts to diversify the kingdom’s hydrocarbon-dependent economy.
This story has been published from a wire agency feed without modifications to the text
