Saudi Oil Giant Breathes Down Apples Neck As Worlds Most Valuable Company –

Thanks to the oil price rally this year, Saudi Aramco has become the world’s second most valuable company in market capitalization terms, worth some $2 trillion, compared with Apple’s $2.3 trillion, Bloomberg reports.

There is more upward potential for the Saudi oil giant’s share price, too, as the outlook on oil remains upbeat.

The energy crunch that started in Europe only to spread to Asia and now looms over the United States, has made natural gas more expensive than oil on a barrel of oil equivalent, spurring greater demand for alternatives, including coal and oil derivatives as sources of power generation.

Earlier this week, Aramco’s chief executive Amin Nasser said the gas crunch had caused demand for oil to rise by half a million barrels daily, and there’s more room for growth. The executive said he expected oil demand to reach 99 million bpd by the end of this year and rise further to top 100 million bpd in 2022.

This outlook has understandably strengthened Aramco’s resolve to boost its maximum sustained production capacity to 13 million bpd.

“Our maximum sustained capacity from 12 to 13 million (bpd)… is not going to come to full capacity at 13 million bpd until 2027,”┬áNasser said at an industry event.

Aramco floated 1.5 percent of its share capital on the Saudi stock exchange in late 2019 and raised $25.6 billion for the company. In January last year, the Saudi giant exercised a greenshoe option on its IPO and issued an additional 450 million shares that raised $3.8 billion. The listing turned Aramco into the world’s largest oil company.

As Bloomberg pointed out, the latest share price developments show how sentiment on stock markets has changed since the start of the pandemic. Initially, Big Tech stocks, including Apple, soared on the back of consumer spending boosted by lockdowns and government stimulus. Now, the tables have turned, stimulus is being phased out, and people are spending less. Meanwhile, energy demand is rising ahead of winter, boosting oil shares.

By Charles Kennedy for

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