Saudi Aramco to increase oil production to meet global demand
Saudi Arabia’s state oil company said it would increase spending on oil production to meet rising global demand, as it reported a doubling of profits in 2021.
Saudi Aramco – the world’s largest oil exporter and one of the world’s most profitable companies – said its net profit increased by 124% to $110bn (£83bn) in 2021, compared with $49bn a year earlier.
The company said its profits had soared as a result of higher crude oil prices as demand for oil rebounded after the pandemic, and also because of increased margins in its refining and chemicals business.
Brent crude oil rocketed to $139 a barrel, a 14-year high, earlier this month, but has since dropped to closer to $100. In early December, a barrel of crude was priced below $70.
Aramco expects demand for oil to keep climbing, and said “substantial new investment” is required to meet this demand, in a move likely to dismay climate campaigners.
It said it is increasing its capital expenditure for 2022 by about half to between $40 and $50bn, with further growth expected until the middle of the decade. The state-owned oil firm’s capital expenditure came in just below $32bn in 2021, an 18% increase on 2020.
Saudi Arabia and the United Arab Emirates have been asked in recent days by western governments to pump more oil to end their reliance on supplies from Russia.
The Gulf countries are the only two leading oil producers that have immediate spare capacity able to offset the shortfall in Russian-produced energy. However, the International Energy Agency (IEA) said in a recent report that Saudi Arabia and the UAE are so far “showing no willingness to tap into reserves”.
The countries are both members of the Opec+ cartel of oil-producing countries, which will meet for the next time
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