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The president of the Saudi oil company, Aramco, on Monday expressed optimism that global oil demand would recover and that the worst of the Covid-19 pandemic would be overcome.
The company’s president and chief executive officer, Amin bin Hassan Al-Nasser, said in a video conference that global demand for crude oil is close to 90 million barrels per day, 10 million barrels less than pre-pandemic levels.
Al-Nasser expected that global oil demand would rise to about 95 million barrels per day by the end of the year.
The demand for oil was greatly affected by the closures that many countries around the world witnessed to contain the outbreak of the new Corona virus, and it declined in a period of time by more than 20 million barrels per day.
While it was not clear how long the current wave of fog will last, Nasser spoke of mounting indications that the worst of the crisis may be behind us.
Al-Nasser said, “The energy market is witnessing a partial recovery in conjunction with the start of various countries around the world to take steps to ease restrictions and revive their economies.”
Al-Nasser described the company’s performance in the second quarter as the worst in generations.
He said, “The unfavorable conditions resulting from the decline in demand and the decline in crude oil prices reflected on our results for the second quarter, but we, thank God, made strong profits.”
In the second quarter of this year, Aramco, the largest oil company in the world, witnessed a major deterioration in its net profits, which amounted to 6.6 billion dollars, a decline of about 73 percent compared to the same period of the previous year when its net profits reached 24.7 Billion dollar.
The company’s net profit also decreased in the first half of the year by 50 percent to 23.2 billion dollars, compared to 46.9 billion dollars in the same period of the previous year.
Al-Nasser said that the company will reduce capital spending in the coming years, stressing that the numbers in 2021 will be much lower than previous expectations.
The President of Aramco confirmed that the company would increase production to 13 million barrels of oil per day compared to 12 million barrels per day now, pointing out that the company is able to continue producing 12 million barrels per day without any increase in spending.
Oil-producing countries reached an agreement to reduce production in April by about 9.7 million barrels, with the aim of trying to achieve a balance between supply and demand in the market to raise prices, in the wake of a price war between Saudi Arabia, the world’s largest crude exporter, and Russia.
Saudi Arabia’s production reached an unprecedented level of 12.3 million barrels, before retreating to 8.5 million in May, as a result of the production cut agreement, and last June, to 7.5 million barrels per day.
© 2020 AFP