The oil company Aramco is Saudi Arabia’s main source of income – and it is far from dried up. In the third quarter, net income climbed to $42.4 billion. And company boss Nasser is certain: the demand for oil will continue to rise.
The Saudi Arabian oil company Aramco is benefiting massively from rising oil prices and thus indirectly from the Russian war of aggression in Ukraine. As the company announced in Riyadh, its net profit rose 39 percent in the third quarter to $42.4 billion (42.7 billion euros). In the same period last year, it was still at $ 30.4 billion.
The growth is mainly due to “higher oil prices and higher sales volumes”. “Although global oil prices have been impacted by ongoing economic uncertainty during this period, our long-term view is that demand for oil will continue to rise for the remainder of the decade,” said Aramco CEO Amin Nasser. He justified this expectation with the worldwide need “for more affordable and reliable energy”.
Aramco is Saudi Arabia’s main source of income. However, Crown Prince Mohammed bin Salman has introduced measures to further diversify his country’s heavily oil-dependent economy. Saudi Arabia leads Opec group of oil exporting countries. Together with other countries – above all Russia – they form OPEC. At the beginning of October, the merger had agreed on a significant reduction in production in November. The move was widely seen as a diplomatic slap in the face to the US, which had explicitly opposed it.
The government in Washington criticized that the leadership in Saudi Arabia was aware that a cut in oil production “would increase Russian revenues and weaken the effectiveness of sanctions (against Russia)”. US President Joe Biden announced “consequences” and a reassessment of the relationship with Saudi Arabia. The government in Riyadh then assured that the decision to reduce oil production was made “purely for economic reasons”. It is by no means a matter of “partisanship by the Kingdom in international conflicts”. Postponing the reduction in production would have led to economic losses.
Rising oil revenues are bringing considerable economic growth to Saudi Arabia. According to a preliminary estimate by the government, the economy grew by 8.6 percent in the third quarter compared to the same period last year. The International Monetary Fund (IMF) is forecasting gross domestic product (GDP) growth of 7.6 percent for Saudi Arabia this year.
