Saudi oil windfall tops $65 billion even without dividend hike

Saudi oil windfall tops $65 billion even without dividend hike

The Saudi government’s oil income almost doubled in the second quarter even as state-controlled producer Aramco held dividends unchanged. The oil giant made payments to the government - its 94 per cent shareholder - of more than $65 billion in the period, up from $35 billion a year earlier, according to financial statements released on Monday. That’s a combination of dividends, income taxes and royalties on oil production. Despite efforts to diversify the economy, Saudi Arabia’s crude is still the major source of government revenue. Soaring prices are set to give the country its first budget surplus in almost a decade, even without Aramco boosting shareholder payouts, most of which go to the government. Under a system introduced in January 2020, Aramco pays a royalty of 80 per cent on Brent crude prices above $100 a barrel, and 45 per cent when oil’s at $70 to $100. Benchmark futures jumped above $100 a barrel in March following Russia’s attack on Ukraine, and stayed above or near that level until the end of July. Aramco has stuck to annual dividend payments of $75 billion a year through oil’s crash in 2020 and subsequent recovery, in contrast to most Big Oil firms.