OIL GIANT SAUDI Aramco has reported profit of €29 billion ($31.88 billion) in the first quarter of the year, down from €35.9 billion (39.47 billion) in the same period last year.

The company, formally known as the Saudi Arabian Oil Co, blamed the fall on lower global oil prices.

Aramco president and chief executive Amin H Nasser said in a statement: “The results reflect Aramco’s continued high reliability, focus on cost and our ability to react to market conditions as we generate strong cash flows and further strengthen the balance sheet.”

Aramco said separately that it “believes it is well positioned to withstand fluctuating commodity prices through its low-cost upstream production”.

Saudi Arabia’s vast oil resources make it one of the world’s least expensive places to produce crude. For every 10 dollar rise in the price of a barrel of oil, Saudi Arabia stands to make an additional 40 billion dollars (€36.4 billion) a year, according to the Institute of International Finance.

In March, Aramco announced earnings of €146 billion ($161 billion) last year, claiming the highest-ever recorded annual profit by a publicly listed company and drawing immediate criticism from climate activists.

The extraction and combustion of fossil fuels is a major driver of greenhouse gas emissions that trap heat inside the atmosphere, causing average global temperatures to rise and destabilising the earth’s climate.

Climate change is already negatively impacting humans and nature and is expected to grow significantly worse unless the world substantially reduces its greenhouse gas emissions.  

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While saying Aramco is “working to further reduce the carbon footprint of our operations”, Nasser remained bullish on the world’s need for crude and natural gas.

“We are also moving forward with our capacity expansion, and our long-term outlook remains unchanged as we believe oil and gas will remain critical components of the global energy mix for the foreseeable future,” he said.

The earnings came off the back of energy prices rising after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Moscow’s oil and natural gas in Western markets.

However, oil prices have sunk in recent weeks amid fears of a coming recession as central banks in the US and elsewhere raise interest rates to try to tame inflation.