while simultaneously lowering its official selling prices, especially to Asia. Though the price of oil rose in May and June and Saudi Arabia decreased its production to help stabilize that price, the financials are not expected to impress. As the company with the most production and largest production capacity in the world, Aramco is particularly susceptible to fluctuations in oil price.
Just how difficult the second quarter was for Aramco will be useful for the oil industry, oil traders and scholars of the industry. The coronavirus and resulting economic lockdowns were going to hurt oil demand no matter what, but Saudi Arabia plummeted the price of oil with its unilateral decision in early March to react to noncooperation from Russia by increasing production to unprecedented levels and cutting prices. Oil fell thirty percent almost at once, and then it kept falling.
From a geopolitical perspective, the second quarter Aramco financials must be seen as important to political stability in the kingdom. The oil industry accounts for about half of the country’s GDP and more than 70% of its exports. The industry also provides more than 60% of the government’s revenue, and the government employees more than 70% of working Saudis.
🧐 Need for Oil = never obsolete ? -MedTech etc.
قَيِّمًا لِّيُنذِرَ بَأْسًا شَدِيدًا مِّن لَّدُنْهُ وَيُبَشِّرَ الْمُؤْمِنِينَ الَّذِينَ يَعْمَلُونَ الصَّالِحَاتِ أَنَّ لَهُمْ أَجْرًا حَسَنًا - 18:2
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