Saudi Aramco, the state-owned oil giant, has reported a profit of £134 billion in the last year, making it the most profitable publicly-listed company in history. The profit was made possible due
to the surge in energy prices following Russia's invasion of Ukraine in February 2022. Sanctions against Russia led to restrictions on the sale of Moscow's oil and natural gas in Western markets, making them reliant on Middle Eastern supplies. The resulting sky-high oil prices contributed to a global cost of living crisis, impacting consumers worldwide.
The high oil prices have also put a strain on the relationship between the United States and Saudi Arabia, which owns 95% of Aramco shares. President Joe Biden has warned Saudi Arabia of "consequences for what they've done" in terms of oil prices. Aramco's profit rose by 46.5% last year compared to the 2021 results, which were already close to a global corporate record. Other oil giants such as Shell, BP, and ExxonMobil also announced record profits in 2022.
The significant profits generated by the energy sector have sparked renewed calls for a windfall tax on energy companies in the UK to alleviate the burden on struggling households. The high oil prices have led to increased inflation, with consumers paying more for essentials such as food and clothing due to higher transport and energy costs.
The record profits made by Aramco have brought attention to the issue of energy security and the reliance on Middle Eastern supplies. With tensions rising between Russia and Western countries, it is crucial to diversify energy supplies to mitigate the impact of geopolitical tensions on the global economy.
The high oil prices have also highlighted the urgent need to transition towards sustainable and renewable energy sources. As the world faces the threat of climate change, there is a growing demand for clean energy solutions to reduce carbon emissions and minimize the impact on the environment.
In conclusion, the record profits made by Saudi Aramco demonstrate the significant impact of geopolitical tensions on the global energy market. The resulting cost of living crisis has highlighted the need for a transition towards sustainable energy sources and greater energy security. While windfall taxes may provide temporary relief to struggling households, a long-term solution requires a shift towards cleaner and more sustainable energy sources. Photo by Berardo62, Wikimedia commons.