Saudi Aramco earned profits of $161 bn in 2022 due to high crude oil prices

Oil giant Saudi Aramco said Sunday it earned a USD 161 billion profit last year.

The firm, known formally as the Saudi Arabian Oil Co., said in its annual report that higher crude oil prices propelled its profits.

It made the announcement on Riyadh's Tadawul stock exchange.

In 2021, Aramco declared profits of USD 110 billion, as compared to USD 49 billion in 2020 when the world faced the worst of the coronavirus pandemic lockdown, travel disruptions and oil prices briefly going negative.

Benchmark Brent crude oil now trades around USD 82 a barrel, though prices had reached over USD 120 a barrel back in June. Aramco, whose fortunes hinge on global energy prices, announced a record USD 42.4 billion profit in the third quarter of 2022 off the back of that price spike.

Those high prices have further strained ties between the kingdom and the United States, traditionally a security guarantor among the Gulf Arab states amid tensions with Iran.

Before the midterm elections in November, the kingdom said the Biden administration sought to delay a decision by OPEC and allies including Russia to cut production that could have kept gasoline prices lower for voters making public the typically behind-the-scenes negotiations common in the region.

President Joe Biden had warned the kingdom that there's going to be some consequences for what they've done in terms of oil prices.

However, those consequences have yet to be seen as Saudi Arabia and Iran went to China to strike a diplomatic deal Friday.

US gasoline prices now stand on average at USD 3.47 a gallon, down just about a dollar from last year.

Saudi Arabia's vast oil resources, located close to the surface of its desert expanse, make it one of the world's least expensive places to produce crude.

For every USD 10 rise in the price of a barrel of oil, Saudi Arabia stands to make an additional USD 40 billion a year, according to the Institute of International Finance.

Shares in Aramco stood at USD 8.74 on Riyadh's Tadawul stock exchange before it opened Sunday. That's down from a high of USD 11.55 a share in the last year.

However, that current price still gives Aramco a valuation of USD 1.9 trillion making it the world's second-most valuable company behind only Apple. The Saudi government still owns the vast majority of the firm's shares.