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Lower oil prices during the second quarter of 2023 had a negative impact on the profits of Saudi Aramco, the state-run oil giant. However, prices have now entered a favorable range desired by the kingdom. (Photo courtesy of Saudi Aramco)
Aug. 7 (UPI) — Saudi Aramco, the state oil giant of OPEC leader Saudi Arabia, reported a 40% decrease in net profit for the second quarter compared to the previous year, primarily due to lower energy prices.
During the second quarter of the year, Saudi Aramco’s net income totaled $30 billion, a decrease from $48.4 billion reported during the same period in 2022. The company sold its products for $78.80 per barrel, in contrast to $113.20 per barrel in the second quarter of 2022. (Source)
Saudi Arabia requires oil to be priced at approximately $80 per barrel in order to maintain a balanced budget. Following the kingdom’s decision to extend a production cut, oil prices have reached around $85 per barrel.
Amin Nasser, the president and CEO of Aramco, expressed optimism about the second half of the year despite potential challenges posed by higher crude oil prices on the global economy.
“At Aramco, we maintain our long-term view. With the expected recovery of the global economy and increased activity in the aviation sector, continued investments in energy projects are crucial for ensuring energy security,” stated Nasser.
Global demand for oil remains steady, even with elevated oil prices. Recent U.S. data shows a 12% increase in the number of people passing through airport security compared to the previous year. Additionally, there has been a 3% increase in the metric used to measure gasoline demand compared to the same period last year.
Aramco is continuing to implement its largest spending program to date, with support from an $11 billion refinery expansion in Saudi Arabia.
Economists at the Organization of the Petroleum Exporting Countries (OPEC) have noted that the Saudi economy is moving in the right direction, despite slower expansion compared to the previous year. In their July report, they stated, “Growth in the near-term is expected to remain strong, with both the oil and non-oil sectors contributing to the momentum and with a strong commitment to government reform programs.”
Saudi Arabia is currently producing close to 10 million barrels of oil per day, solidifying its position as one of the global leaders in oil production alongside Russia and the United States.
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