BUSINESS Saudi Aramco Q2 profits bounce back to pre-pandemic levels

BUSINESS

Saudi Aramco Q2 profits bounce back to pre-pandemic levels

AFP

10:26, August 09, 2021

Energy giant Saudi Aramco's second quarter profits for 2021 have bounced back to pre-pandemic levels due to higher oil prices, nearly quadrupling compared to the same period last year.

Fire water storage tanks at the Khurais Processing Department in the Khurais oil field in Khurais, Saudi Arabia, June 28, 2021. (Photo: VCG)

The company's success comes after its debts climbed last year, when Saudi Arabia was hammered by the double whammy of low prices and sharp cuts in production triggered by the COVID-19 pandemic.

Aramco said on Sunday its net profit rose to $25.5 billion in the second quarter of the year, compared to $6.6 billion in the same quarter of 2020, owing to a stronger oil market, higher refining and chemicals margins and the easing of COVID-19 restrictions.

In the second quarter of 2019, before global economies were hit hard by the restrictions, the company posted a net profit of $24.7 billion.

"Our second quarter results [for 2021] reflect a strong rebound in worldwide energy demand, and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum," Aramco Chief Executive Amin Nasser said in a statement.

Aramco – like other global oil giants, including ExxonMobil, Royal Dutch Shell and TotalEnergies – has reported stronger profits this year, riding a wave of higher prices amid recovering demand.

It reported "a 288-percent increase in net income from the same quarter of last year to $25.5 billion and declaring a dividend of $18.8 billion," according to the statement.

Sunday's announcement comes approximately two months after the company said it raised $6 billion from its first dollar-denominated Islamic bond sale, posting earlier this year a 30-percent jump in first quarter profits.

Aramco – the kingdom's cash cow – said in May that its net profit rose to $21.7 billion in the first three months of the year.

The energy giant posted a 44.4-percent slump in 2020 net profit, piling pressure on government finances as Riyadh pursues its multi-billion dollar projects to diversify the economy.

The world's leading oil producers agreed last month to continue to modestly boost output from August, reaching a compromise after the United Arab Emirates blocked a deal.

An OPEC+ meeting decided to raise output by 400,000 barrels per day each month from August to help fuel a global economic recovery as the pandemic eases.

The results come a day ahead of a UN report on climate change, which will give the international community its clearest ever warning about the dangers of accelerating global warming, according to Britain's COP26 President Alok Sharma.

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