Saudi Aramco announced a historic profit of $161.1 billion.

On Sunday, Aramco the oil giant from Saudi Arabia, announced a yearly net profit of $161.1 billion for 2022, setting a new record with a 46% increase from the previous year due to higher energy prices, greater volume sales, and improved margins for refined products.

This profit is approximately three times more than Exxon’s $56 billion. In February, other global peers such as BP (BP.L), Shell (SHEL.L), and Chevron (CVX.N) also reported record profits for the previous year.

The year 2022 saw oil prices experience significant fluctuations, initially rising due to geopolitical concerns surrounding the conflict in Ukraine, but later plummeting as China, the leading importer, exhibited weaker demand and concerns regarding a worldwide economic downturn surfaced.

Aramco’s CEO, Amin Nasser, stated in the results report, “Considering our projection that oil and gas will continue to be crucial for the foreseeable future, the dangers of insufficient investment in our sector are substantial, which could lead to increased energy prices.”

To tackle these difficulties, Aramco is pursuing investments in novel lower-carbon technologies that may lead to further reductions in emissions, according to Nasser.

The statement also confirmed that Aramco remains on course to increase its crude production capacity to 13 million barrels per day (bpd) by 2027.

In 2022, the company’s capital expenditure increased by 18% to $37.6 billion, and it is projected that spending for the current year will be between $45.0 billion and $55.0 billion, including external investments.

Aramco has announced a dividend of $19.5 billion for the fourth quarter, reflecting a 4% increase from the previous quarter. The board has also recommended granting bonus shares, with eligible shareholders receiving one share for every 10 shares held.

In 2022, free cash flow reached a record high of $148.5 billion, up from $107.5 billion in the previous year.

Oil prices skyrocketed in March 2022, with Brent, the international benchmark, reaching its highest point since 2008 at $139.13 a barrel, following Russia’s invasion of Ukraine, which disrupted global crude flows. However, prices dropped significantly in the second half of the year due to interest rate hikes by central banks and concerns about an impending recession.

Saudi Arabia, leading the OPEC+ producer alliance, agreed to cut output by 2 million bpd from November 2022 until the end of 2023 to support the market, a move that drew criticism from the United States and other Western countries. Nonetheless, market dynamics since then have demonstrated the wisdom of the cuts, with oil prices hovering around $80 a barrel, down from over $100 in 2022.

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