In its first six months as a public company the world’s biggest oil firm shows unrivalled strength—and unusual weakness

火的考验 Trial by fire-书迷号

Aramco’s 262bn barrels of crude reserves and low production costs also allow it to limit spending without threatening future output, unlike America’s frackers, forced to pare back activity as investors sour on shale. Big international companies are slashing capital spending, too. BP and Eni, an Italian major, plan to reduce crude production over the next decade, amid investor disenchantment with oil’s returns and rising concern over climate change. If that continues, Aramco may gain market share with no need for another price war.


To the sceptics, saying Aramco is more resilient than rivals is like boasting that milk is sour but not curdled—neither prospect is appetising. The outlook for oil remains uncertain as consumer habits change, electric cars get cheaper and governments mull new climate regulations.


A bigger short-term worry is Saudi Arabia’s sway over Aramco. The firm now has minority shareholders but they remain powerless. And recent months have shown how complicated royal control can be.


Aramco’s production depends not on market forces, but on Saudi priorities. At the height of the price war in April Aramco pumped 12.1m barrels a day—an impressive feat that helped drive down global prices and lower Aramco’s profits. For every dollar the oil price falls, Aramco’s cashflow generally declines by $1.5bn, reckons Neil Beveridge of Bernstein, a research firm.

沙特阿美的产量并不取决于市场力量,而是取决于沙特政府对轻重缓急的选择。4月价格战最激烈的时候,沙特阿美每天的石油产量达到1210万桶,这一惊人壮举帮助拉低了全球油价,同时也压低了沙特阿美的利润。研究公司盛博的尼尔·贝弗里奇(Neil Beveridge)表示,油价每下跌一美元,沙特阿美的现金流通常就会减少15亿美元。

As Saudi Arabia made peace with Russia and others in an attempt to balance crude markets in May and June, Aramco has returned to its role as oil’s central banker. That is better than waging a price war in a pandemic, but still awkward for Aramco. The kingdom calibrates its output not just to support oil prices but to encourage other petrostates to do the same.


Aramco’s interests and the kingdom’s can diverge in other ways. For example, even as the market value of SABIC, which is also listed in Riyadh, has fallen over the past year Aramco did not renegotiate the $69bn purchase price agreed in 2019. Aramco’s chairman, Yasir Al-Rumayyan, also leads Saudi Arabia’s Public Investment Fund, which sold Aramco its 70% stake in SABIC and which is also tasked with investing to diversify the Saudi economy.

沙特阿美与沙特王国的利益也可能在其他方面产生分歧。例如,同样在利雅得上市的SABIC去年市值下滑,而沙特阿美并没有重新谈判在2019年达成的690亿美元的收购价格。沙特阿美的董事长亚西尔·鲁迈扬(Yasir Al-Rumayyan)同时也是沙特公共投资基金(Public Investment Fund)的负责人。该基金将自己持有的70%的SABIC股份出售给了沙特阿美,它肩负着投资推动沙特经济多元化的任务。

That economy is strained. Last year Saudi Arabia needed an oil price of more than $80 a barrel to balance its budget. Brent crude, the international benchmark, has not fetched more than $50 since February. Despite spending cuts Saudi Arabia still faces a yawning deficit.


All of Aramco’s shareholders covet the same thing: payouts. To lure investors before listing, Aramco said it would give priority to non-state shareholders’ dividends for five years, come hell, high water or cheap oil. No one really thought it would have to make that choice. Now it has borrowed to meet its $75bn dividend pledge. As Mr Beveridge notes, that stategy is unsustainable at current oil prices. Those prioritised payments remain subject to approval by the board. Sooner or later Aramco will have to decide: keep the promise to minority owners or renege? That will be a real test of its bona fides as a public company. ■