Saudi Aramco profits soar by almost a third as oil prices rally

Saudi Aramco’s profits soared by almost a third after vaccine rollouts brought hope of an economic recovery – sparking a rally in the oil price.

The world’s largest oil company made £15.6billion in the first quarter, smashing analysts’ forecasts of £14billion.

Its profits had tumbled in the first three months of 2020, when crude prices nosedived as most of the world went into strict lockdowns.

Gushing profits: Saudi Aramco – the world’s largest oil company – made £15.6bn in the first quarter – smashing analysts’ forecasts of £14bn

But chief executive Amin Nasser yesterday said ‘better days are coming’ as it committed to paying a whopping £13.5billion dividend for the first quarter alone.

Virtually all of this will go to the Saudi government.

The update sent oil stocks higher, with BP up 2.4 per cent and Royal Dutch Shell by 0.7 per cent.

Aramco said its refining and chemicals arms had performed well. But most of the boost was from higher crude prices, which rocketed from $51.80 a barrel at the start of 2021 to $65 at the end of March.

The profit boost came even as Saudi Arabia’s daily production fell to 8.6m barrels, from 9.8m a year before.

Several countries in the Opec+ cartel, which includes Saudi Arabia, cut down on the amount they produced for months as demand slid during the lockdowns.

Aramco is the latest major energy group to report a rebound in profits. BP and Shell, and foreign firms such as France’s Total, have all reported spiralling earnings.

Nasser said: ‘There are more reasons to be optimistic that better days are coming.

‘And while some headwinds still remain, we are well positioned to meet the world’s growing energy needs as economies start to recover.’

Aramco’s results came as oil prices climbed by 2 per cent to reach $68.50 as several US states lifted Covid restrictions.

Tamas Varga, analyst at PVM Oil Associates, said the market was focused on ‘the successful rollout of vaccine programmes in the US and in other developing countries and not on the devastation in India and Brazil’.

Other major commodities have also surged in value, including copper and iron ore.

This has prompted talk of a ‘commodity supercycle’ as the global economy bounces back from the pandemic and governments plough money into programmes that will raise demand for raw materials.