OIL giant Saudi Aramco said on Sunday that it had raked in a staggering record $161 billion (£133.8bn) in profits last year, attributing its earnings to higher crude oil prices.

The firm said in its annual report that the profit represented “its highest annual profits as a listed company.”

Saudi Aramco chief executive Amin H Nasser said in a statement: “Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real, including contributing to higher energy prices.” 

Mr Nasser said that Aramco would spend $37.6bn (£31.2bn) to expand its production capacity.

Aramco also declared a dividend of $19.5bn (£16.2bn) for the fourth quarter of 2022, to be paid in the first quarter of this year.

In 2021 Aramco declared profits of $110bn (£91.4bn), as compared to $49bn (£40.7bn) in 2020 when the world faced the worst of the coronavirus pandemic lockdown, travel disruptions and oil prices briefly going negative.

Benchmark Brent crude oil now trades around $82 (£68) a barrel, though prices had reached over $120 (£99) a barrel back in June. 

Aramco, whose fortunes hinge on global energy prices, announced a record $42.4bn (£35.2bn) profit in the third quarter of 2022 off the back of that price spike.

Those high prices have further strained ties between the kingdom and the United States, traditionally a security guarantor among the Gulf Arab states amid tensions with Iran. 

The announcement came days after the Saudis and Iran agreed to restore diplomatic relations and reopen their embassies and missions after China-brokered talks.

The move, announced on Friday, was hailed as a major diplomatic coup for China.

News of the rapprochement between long-time regional rivals sent shock waves through the Middle East on Saturday.

It dealt a blow to Israeli Prime Minister Benjamin Netanyahu, who has trumpeted the threat posed by Tehran.

The breakthrough, after more than a year of negotiations, also became ensnared in Israel’s internal politics, reflecting the country’s divisions at a moment of national turmoil.

A statement posted on the Chinese Foreign Ministry website on Saturday said that China will continue to support countries in the Middle East in “resolving differences through dialogue and consultation to jointly promote lasting peace and stability.

“We respect the stature of Middle East countries as the masters of this region and oppose geopolitical competition in the Middle East.”