Aramco Profit Soars on Higher Crude Prices, Operating Leverage
Saudi Aramco's second-quarter profit soared by 41.9% to 122 billion riyals, largely due to a significant increase in realized crude prices.
The oil giant saw its revenue rise 19% year-over-year to 451 billion riyals, driven by higher realized crude prices and stronger refining margins.
According to United Securities, a Saudi brokerage, the quarter was a 'pricing story,' with operating leverage playing a key role in Aramco's profit growth. The firm noted that once fixed costs are covered, changes in selling price per barrel can have a quick impact on profits.
United Securities also highlighted geopolitical uncertainty as a contributing factor to higher crude prices during the quarter and expects average prices to remain elevated, supporting Aramco's earnings resilience in the near term. However, it cautioned that Aramco has limited flexibility to raise output after disruptions, which may limit the impact of high prices on volumes.