New Delhi: The State oil company of Saudi Arabia has decided to increase the production of crude oil to meet the global demand as it reported a doubling of profits in 2021. 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.
Saudi Aramco – the world’s largest oil exporter and one of the world’s most profitable companies – said its net profit increased by 124 percent to $110bn in 2021, compared with $49 billion a year earlier.
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 in 2020.
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 at the end of March to decide on output levels. Despite the conflict in Ukraine, Opec members only agreed earlier this month to raise output by a modest 400,000 barrels a day.
(VINAYAK)