Crude tactics

21 Mar 2022 By Karen Kwok Follow @KarenKKwok

Riyadh’s $2.3 trln oil giant is looking to hike output. If the kingdom starts to price some crude sales in yuan instead of dollars, higher Chinese exports could increase its stocks of renminbi. That could focus Saudi minds on whether to hitch its future to Beijing or Washington.

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Saudi Aramco on March 20 reported $110 billion in net profit in 2021, up from $49 billion a year earlier. Aramco also said it would boost its capital expenditure to between $40 billion and $50 billion this year, up from $31.9 billion in 2021.

Aramco said it plans to increase its maximum production capacity from 12 million to 13 million barrels a day by 2027. The company maintained its full-year cash dividend at $75 billion.

Saudi Arabia has been in talks with China over yuan-priced oil for six years but has sped up the negotiations this year, the Wall Street Journal reported on March 15.

The reasoning behind the move points to the kingdom’s frustration over Washington’s attempts to strike a deal with Iran, and following the precipitous U.S. withdrawal from Afghanistan, the WSJ reported.

Aramco on March 8 said it signed a Memorandum of Understanding with China Petroleum & Chemical Corporation (Sinopec) for potential downstream collaboration in China.

Context News

Aramco said it plans to increase its maximum production capacity from 12 million to 13 million barrels a day by 2027. The company maintained its full-year cash dividend at $75 billion.

Saudi Arabia has been in talks with China over yuan-priced oil for six years but has sped up the negotiations this year, the Wall Street Journal reported on March 15.

Aramco on March 8 said it signed a Memorandum of Understanding with China Petroleum & Chemical Corporation (Sinopec) for potential downstream collaboration in China.

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