Saudi Arabia’s state-owned oil giant, Aramco, has announced a record profit of $161.1 billion for 2022, representing a 46.5% increase compared to the previous year. The surge in profits can be attributed to high energy prices and increased volumes. Aramco has declared a dividend of $19.5 billion for the October to December quarter of 2022, which will be paid in the first quarter of 2023. The Saudi government, which owns almost 95% of the company’s shares, will receive the majority of the dividend.
Aramco is not the only energy firm to report record profits. Following Russia’s full-scale invasion of Ukraine in February 2022, energy prices have soared, leading to ExxonMobil making $55.7 billion and Shell reporting $39.9 billion in profits.
The benchmark oil price, Brent crude oil, currently trades at around $82 a barrel, although prices exceeded $120 a barrel in March and June last year after Russia’s invasion. Commenting on Aramco’s performance, Robert Mogielnicki of the Arab Gulf States Institute in Washington said, “Aramco rode the wave of high energy prices in 2022. It would have been difficult for Aramco not to perform strongly in 2022.”
In response to the company’s announcement, Aramco’s CEO, Amin Nasser, stated that the company would focus not only on expanding oil, gas and chemicals production but also on investing in new lower-carbon technologies. Aramco is the world’s second-most valuable company, after Apple, but is also a major emitter of greenhouse gas emissions that contribute to climate change.
Agnès Callamard, the Secretary-General of Amnesty International, criticized the company’s profits, saying, “It is shocking for a company to make a profit of more than $161 billion in a single year through the sale of fossil fuel – the single largest driver of the climate crisis.”
Saudi Arabia is the largest producer in the oil cartel OPEC (Organization of the Petroleum Exporting Countries) and has been accused of a range of human rights abuses, including its involvement in the conflict in Yemen, the murder of journalist Jamal Khashoggi in 2018, the jailing of dissidents, and the widespread use of capital punishment.
In a separate development, Iran announced that its oil exports had reached their highest level since the re-imposition of US sanctions in 2018. Oil Minister Javad Owji stated that exports had increased by 83 million barrels in 2022 compared to the previous 12 months. The rise is attributed to greater shipments to Iranian allies China and Venezuela. Tehran’s export revenues took a significant hit after then-US President Donald Trump pulled out of a landmark nuclear deal five years ago, and the US sanctions, coupled with economic mismanagement and corruption, have meant that the Iranian economy has not had any substantive growth in the past decade. By some measures, it is still 4-8% smaller than it was back in 2010.
In conclusion, Aramco’s record profits for 2022, along with other energy firms, can be attributed to high energy prices and increased volumes. The company plans to expand oil, gas and chemicals production and invest in new lower-carbon technologies to address challenges related to climate change. While Aramco’s profits have been criticized for contributing to the climate crisis, Saudi Arabia has been condemned for a range of human rights abuses, and Iran’s economy continues to struggle due to US sanctions, economic mismanagement, and corruption.