Saudi Aramco’s profits soared by 30% for the first quarter of the year, riding on the back of higher crude oil prices.
The company’s financial results show a net income of 21.7 billion dollars (£15 billion) for the first three months of the year, compared to the same period in 2020 when Aramco’s earnings plunged to 16.7 billion dollars (£12 billion) as the early effects of the coronavirus pandemic were beginning to dramatically drive down global demand for oil.
Brent crude plummeted to around 20 dollars a barrel at its lowest point last year.
Aramco said the increase in profits primarily reflects the impact of higher crude oil prices which have averaged around 60 dollars a barrel in recent months.
Prices have steadily climbed amid increased global demand for crude and disciplined cuts to production by producers to balance the market.
Aramco produced some 9.2 million barrels a day in 2020, compared to a current average of 8.6 million barrels a day for the first quarter of 2021.
The company also confirmed it would deliver on a promised dividend payout of 18.75 billion dollars (£13.5 billion) for its shareholders this quarter. Nearly all of that payout goes to the Saudi government, which owns more than 98% of the company, with the remaining 1.7% trading on the Saudi stock market.
Aramco’s higher earnings will come as welcome relief to the Saudi government, which continues to rely heavily on the company’s barrels of oil for revenue.
Aramco, which produces all of the kingdom’s oil and gas, is central to Crown Prince Mohammed bin Salman’s efforts to diversify the economy.
The prince intends to transfer ownership of Aramco to the country’s sovereign wealth fund and use the earnings for investments abroad and locally with the aim of spurring new sectors and generating millions of new jobs for Saudi youths.
Aramco chief executive Amin Nasser said the first-quarter earnings are a sign that “better days are coming”.
“While some headwinds still remain, we are well positioned to meet the world’s growing energy needs as economies start to recover,” he said.
The company noted in its earnings report that while vaccination programmes around the world to combat Covid-19 are an encouraging development, the pandemic is far from over.