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Lower oil prices during the second quarter of 2023 negatively impacted the profits of Saudi Aramco, the state-run oil giant. However, prices have now stabilized within the desired range of the kingdom. Photo courtesy of Saudi Aramco.
Aug. 7 (UPI) — Saudi Aramco, the leading oil company in OPEC’s Saudi Arabia, reported a net profit for the second quarter that was 40% lower than the previous year due to a decline in energy prices during that period.
In the second quarter of the year, Saudi Aramco’s net income was $30 billion, compared to $48.4 billion reported during the same period in 2022. The company sold its products for an average of $78.80 per barrel, down from $113.20 per barrel in the second quarter of 2022.
In order to achieve fiscal balance, Saudi Arabia requires oil prices to be around $80 per barrel. Following the decision to extend a production cut of 1 million barrels per day for an additional month, oil prices are now closer to $85 per barrel.
Amin Nasser, the president and CEO of Aramco, expressed optimism about the second half of the year, despite the potential challenges posed by higher crude oil prices on the global economy.
“At Aramco, our long-term outlook remains unchanged,” Nasser stated. “With a projected recovery in the global economy and increased activity in the aviation sector, continued investments in energy projects will be necessary to ensure energy security.”
Global demand for oil remains stable, even with elevated prices. U.S. data shows an increase of 12% in air travel, with 2.7 million people passing through airport security on Sunday compared to the previous year. Additionally, gasoline demand has increased by 3% compared to the same period last year.
Aramco continues to maintain its largest spending program to date, supported by an $11 billion refinery expansion in Saudi Arabia.
Economists at the Organization of the Petroleum Exporting Countries have stated that the Saudi economy is progressing in the right direction, despite a slower rate of expansion compared to the previous year.
“Both the oil and non-oil sectors are contributing to the current growth momentum, thanks to a strong commitment to government reform programs,” the economists wrote in their July report.
Saudi Arabia’s daily oil production is approximately 10 million barrels, positioning it as a global leader in oil production alongside Russia and the United States.
