Amongst the many business sectors impacted by the novel coronavirus, the oil market is reporting a considerable rebound in terms of demand and consequently prices. The Saudi state-owned Aramco has just announced major spikes in sales prices, hoping that such a current recovery is long-term.
Saudi oil giant Aramco sees profits soar by almost 300% https://t.co/gZ5fs3WiZ2— BBC News (World) (@BBCWorld) August 9, 2021
According to the latest announcement made by Aramco, the world's biggest oil producer celebrated a 103% increase in net income during the first half of 2021, compared to 2020. The company has also reported a 288% jump in 2021 Q2 net income compared to the same period of 2020, which marks the worst months for the energy sector in decades.
While the company was hit hard by the COVID-19 pandemic and the restrictions it imposed on the world during the early months of 2020, it is now seeing strong signs of recovery, supported by the growing demand across the world, thanks to easing movement curbs and the latest OPEC+ agreement that aims to achieve steady growth in oil prices.
Moreover, Aramco's official sales prices which are released on a monthly basis are based on refiners' recommendations, which provides producers with crucial data on future needs and therefore the right decisions to make. This explains Aramco's overall good performance which has led to the current surge in sales prices.
However, the fact that the oil industry is one of the most volatile ever, and due to the prolonged state of instability that has been looming over all around the world, producers such as Aramco, the UAE-based ADNOC, and others in the GCC need to practice a high a sense of caution, keeping an eye on virus developments and international travel activity.
Luckily, interruptions in terms of demand remain temporary as long as health experts continue to reassure the world of vaccine efficiency against the different variants that keep emerging across the globe. Yet, the possibility that new variants can potentially resist vaccines and restore the global state of emergency continues to threaten the oil demand and the stability of the market.
Over the last few days, oil prices have seen a 4% decline due to Chinese decisions of halting travel in regions where infections are rising, amid fears of the Delta+ variant, about which experts know very little to date.
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