Saudi Aramco closes near $2 trillion valuation on back of higher oil prices
RIYADH: Oil giant Saudi Aramco closed on Wednesday just shy of a $2 trillion valuation buoyed by high oil prices and increased demand for energy, as economies recover from last year’s pandemic lockdowns Arab News reported.
Aramco touched the $2 trillion market cap moment during the day, but ultimately closed at $1.99 trillion, or what is SR37.3 ($9.95) a share. It has not reached this peak in trading since December 2019, days after the company’s debut on the Saudi stock exchange.
The world’s largest oil exporter has now replaced Google to become the third largest listed company in the world, according to Al Eqtisadiah.
Aramco now ranks third behind Microsoft and Apple as the world’s most valuable company, far exceeding the combined value of some of the world’s biggest oil companies.
The rally for Aramco comes as Brent crude oil prices climb to around $82 a barrel, the highest in seven years. Demand for energy is picking up, despite the ongoing coronavirus’ continued toll on travel and other key gasoline-guzzling sectors.
Aramco is closely watched by energy traders and insiders because of both its size and importance to world energy markets.
Despite fluctuations in Aramco’s yearly earnings, the company has stuck to its promise to pay an annual dividend of $75 billion until 2024 to shareholders.
Crown Prince Mohammed bin Salman was the force behind the government’s effort to publicly list a sliver of Aramco in late 2019.
The demand for oil is forecast to hit 99 million barrels per day by the end of the year, and a little over 100 million per day next year.
“We are satisfied that the worst is over,” OPEC Secretary-General Mohammed Barkindo said on Wednesday during the virtual Energy Intelligence Forum.
The oil producers’ alliance said this week they are maintaining a gradual approach to restoring production levels that had been slashed during the pandemic, agreeing to add only 400,000 barrels per day in November.
Their meeting on Monday lasted “a record 25 minutes,” Barkindo noted.
Also speaking at the virtual Energy Intelligence Forum was Iraq’s Oil Minister Ihsan Ismaeel. He said oil prices that reach $120 a barrel would be great for his country, which is heavily reliant on oil exports, but he acknowledged that such a cost is not sustainable.
He said a range of between $75-$80 a barrel would be a “fair price” for both producers and consumers.
While higher oil prices bode well for some producers, White House National Security Adviser Jake Sullivan raised concerns about rising prices when he met with top Saudi officials, including the crown prince, in a visit to Riyadh last week that focused on a range of issues.
The White House has said it wants to ensure gas prices are kept down for the American public.
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