Saudi Arabia’s state-owned oil company Saudi Aramco is expected to release its second quarter earnings today. The release is scheduled
Saudi Arabia’s state-owned oil company Saudi Aramco is expected to release its second quarter earnings today.
The release is scheduled to take place before the Saudi stock exchange Tadawul opens on Monday. Earnings are expected to drop from just under $17 billion in first quarter earnings to a predicted $9 billion as the COVID-19 pandemic took a massive toll on the global oil industry. Losses were compounded by the Saudi-Russian oil price war, which ramped up production and lowered prices in April and May.
Saudi Aramco is a major source of Saudi wealth and export products, and should third quarter earnings remain poor, expect political turbulence in the kingdom. Public discontent and distrust in Crown Prince Mohammed bin Salman (MBS) will likely increase; he has based his power bid on promoting economic and social reform through domestic investment and public stipends, but these programs may be cut back as state revenues decrease. Senior royal rivals may later use the economic downturn as an excuse to block MBS’s succession. The crown prince has caused outrage under his rule due to targeted corruption investigations of royal family members, strong-arming of regional leaders and the murder of journalist Jamal Khashoggi. However, due to MBS’s promise of more progressive rule, it is unlikely that the Saudi public will turn against him.
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