Saudi Aramco Reaches $ 2 Billion Valuation Due to Rising Oil Prices | Economic news

By AYA BATRAWY, Associated Press

DUBAI, United Arab Emirates (AP) – Saudi oil company Aramco reached a valuation of $ 2 trillion as it hit near record highs during trading hours on Wednesday.

Its market capitalization value places Aramco just behind Microsoft and Apple as the most valuable company in the world. It comes as crude oil prices climb to over $ 82 a barrel, the highest in seven years.

Demand for energy is increasing, despite the ongoing toll of the ongoing coronavirus pandemic on travel and other key energy-consuming sectors.

Aramco is primarily owned by the government of Saudi Arabia, with just under 2% of the company listed on the Saudi Tadawul stock exchange. Aramco was trading at about 37.6 riyals per share, or a few cents on $ 10 per share, Wednesday at noon before falling to 37.2 riyals per share, or about $ 9.92 per share. It remains to be seen if he can hold this rally until the markets close.

Political cartoons

Saudi Crown Prince Mohammed bin Salman was the architect behind the effort to publicly inscribe a Shard of Aramco at the end of 2019, touting it as a way to raise capital for the kingdom’s sovereign wealth fund in order to further develop new cities and mega-projects across the country that create needed private sector jobs for young Saudis. The Crown Prince has long sought the gigantic valuation of $ 2 trillion for Aramco.

Despite fluctuations in Aramco’s annual earnings, the company has kept its promise to pay an annual dividend of $ 75 billion through 2024 to shareholders, the most important of which is the government.

Aramco produces the kingdom’s vast oil and gas products and receives monthly supply production guidelines from the Ministry of Energy of Saudi Arabia, the backbone nation of OPEC.

Crankcase and other major allied oil producers are maintaining a phased approach this week to restore production levels that had been reduced during the pandemic, agreeing to add just 400,000 barrels per day in November.

Oil demand is expected to reach 99 million barrels per day by the end of the year, and just over 100 million per day next year.

Aramco grossed around $ 47 billion in net income in the first half of 2021, double what it earned in the same period last year when the coronavirus blocked travel and crushed global demand of oil. This has brought Aramco back to where it was before the pandemic hit and sank its profits.

Copyright 2021 The Associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Source link

Felix J. Dixon

Leave a Reply

Your email address will not be published.