Ever since the Russia war with Ukraine, prices of oil and other commodities have risen and many people have bought oil stocks and hopefully the price has gone up. Generally when a crisis happens we look domestically first, but afterwards we need to look around to the international world. For if a domestic industry has benefited that means an foreign industry has benefited. In this case the non domestic industry is Saudi Arabia.
In an article by Saeed Ahar and Maha El Dahan of Reuters, the biggest producer of oil in the world is Saudi Arabia and a couple years ago, the Saudi Arabian Oil Co went public which means it reports its results. The company profits doubled in 2021.
Saudi Arabian Oil Co or Aramco made $110 billion in net profit up from $49 billion a year earlier. The net profit was in line with analysts’ expectation of $106 billion. Analysts are expecting net profit of $140 billion in 2022. The dividend was $75 billion.
Saudi Arabian Oil Co says it would boost capital expenditures (capex) to $40 billion to $50 billion this year up from $31.9 billion. The company expects to have production of 13 million barrels of oil a day by 2027 and to increase gas production more than 50% by 2030.
Linking to dividend paying stocks, if your investments are linked to a commodity and the price of the commodity goes up and stays higher, expect higher dividends and higher share prices. There are many analysts following every industry, which means you can have an idea when prices are expected to go up and expected to go down, just try not to time the market. You will know when prices are down when dividend payments are cut, however being positive when prices are up, expect higher dividends.
There are more questions than answers, till the next time – to raising questions.