Oil giant Saudi Aramco announced that its profits for the first three months of the year rose by more than 80% at prices backed by global demand after the pandemic and the war in Ukraine.

Bumper in the first quarter earned the state-owned firm that overtook Apple as the world’s most valuable company last week, showed record net income of $ 39.5 billion (£ 32.2 billion), compared to $ 21.7 billion (£ 17.7 billion) for the same period last year .

This was broadly in line with analysts’ forecasts.

This figure means the highest quarterly profit of the oil group since 2019, when Saudi the government, which owns 98% of the company, sold 1.7% of the shares in mostly Saudi state and regional offices.

Revenues from global energy companies such as BP and Shell have risen to their highest level in ten years amid rising commodity prices, even though many have reduced asset values ​​as a result of leaving Russia.

High incomes have prompted growing calls in the UK to introduce an unexpected tax on oil and gas companies to help households cope with the cost of living the crisis that was caused by rising energy prices.

In his statement, the CEO of Aramco linked the growth of profits with rising prices, as well as with increasing production.

President and CEO Amin H. Nasser said: “Amid increasing volatility in global markets, we remain focused on helping meet global demand for energy that is reliable, affordable and increasingly sustainable.”

Oil prices rose to a 14-year high of $ 139 (113 pounds) a barrel in March immediately after the Kremlin’s invasion of Ukraine, though later declined as Russian oil continued to flow and the resumption of the blockade held back demand in China. .

Brent oil prices rose nearly 70% in the first quarter to $ 107.91 (£ 88) a barrel from the end of March 2021.

Shares of Aramco jumped 1.85% on Sunday in earnings.

The stock has risen since the beginning of the year, making it the most valuable company in the world last week with a market capitalization of around $ 2.43 trillion (£ 2 trillion).

The oil group said it had retained its cash dividend of $ 18.8 billion (£ 15.3 billion) for the fourth quarter of last year, ending one of the largest cash dividends of the year.

Strong quarterly results emerged after economic recovery and easing of global restrictions on coronavirus had already brought the firm record annual results last year.

Sharp oil prices have provided a major boost to Saudi Arabia’s economy, which saw the fastest economic growth in a decade in the first quarter.

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Should oil companies pay income tax?

This comes amid growing demands from the UK for a one-off fee from energy companies to help families in need.

Labor leader Ed Miliband told Sky News that the chancellor would eventually succumb to pressure and impose a tax on windfall profits as it is a “case of no response”.

Although Chancellor Rishi Sunak and Prime Minister Boris Johnson have so far opposed calls for such a move, they do not rule it out.

On Sunday at Sky’s Sophy Ridge, Mr Miliband, the shadow secretary of state for climate change and net-zero, said: “Of course, the right thing to do is to levy a tax from these oil and gas companies so we can provide proper assistance to families.”

He added: “I find it openly obscene that the government refuses to do so.

“My message to the Chancellor is: ‘You are going to introduce a tax on windfall income.’ I believe that he will introduce a tax on unexpected income, because, frankly, this is an irresponsible case. “

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An unexpected tax is right

Meanwhile, Francis O’Grady, head of the Congress of Trade Unions, told Ridge: “All the evidence that prices were driven by rising energy prices, not wages, which should fall in real terms.

“We need the chancellor, who I’m afraid has strongly supported working families, to come back with a tax on energy companies that will give some immediate help.”

However, Business Secretary Kwasi Quarteng said he was still against such a fee.

He added: “I have always opposed this publicly and privately, but as every chancellor I remember said, four months before the budget no options have been considered.

“It’s perfectly reasonable.”

https://news.sky.com/story/saudi-oil-giant-aramcos-profits-rocket-by-80-fuelled-by-ukraine-invasion-12613673

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