Aramco sees profits up nearly 300 percent as Sadia Arabia experiences a dramatic rebound from last year’s pandemic-hit oil demand.  Thanks to prices that have increased by 30 percent since the beginning of the year, as well as steadily increasing demand, Saudi Arabia’s oil industry is going from strength to strength in 2021.

The oil and gas industry is finally seeing some growth after stagnation in 2020 due to ongoing vaccination efforts, the easing of Covid-19 restrictions worldwide, and the return of economic activity.

Aramco this week announced a net income increase of $25.5 billion, or 288 percent, in the second quarter of 2021. This comes just after US firm Exxon Mobil announced an increase of $4.7 billion in their second quarter, and high profits from Royal Dutch Shell, showing the resilience of a hard-hit industry.

Amin Nasser, CEO of Aramco, said in a statement, “Our second-quarter results reflect a strong rebound in worldwide energy demand and we are heading into the second half of 2021 more resilient and more flexible, as the global recovery gains momentum.”

The Saudi government is now expected to reduce the budget deficit which inflated significantly during the pandemic. Aramco’s annual dividend represented the world’s largest at $75 billion, which helped fund Saudi Arabia while under Covid restrictions.

Related: Shell Reports $5.5 Billion Net Profit And Hikes DividendsThe rebound of Saudi’s oil industry has had a knock-on effect on the economy as a whole which saw a 10.1 percent growth in the non-oil sector in the second quarter. The IMF now anticipates that the Saudi economy will grow by 2.4 percent this year, which could happen faster if the government decides to relax Covid restrictions faster as well as boosting oil production.

Following a continuous climb in oil prices since the beginning of the year, as producers cut output levels to spur on this price increase, OPEC+ finally decided last month that they would be boosting oil supply from August to meet demand before oil prices become overinflated.

Saudi Arabia is also looking beyond its oil industry, after years of dependence on its strong oil and gas sector, to stimulate the non-oil sector through multi-trillion-dollar spending. This is part of Saudi’s Vision 2030 program which will see the Public Investment Fund injecting over $40 billion a year into the local economy through 2025.

However, Saudi Arabia will have to improve its competitive edge if it wants to continue seeing demand increase across the key market in Asia. Due to the prevalence of the Delta variant of Covid causing several countries to introduce stricter restrictions as well as cheaper competitors in the region, Saudi Arabia is finding it hard to maintain its appeal in the Asian market.

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While Saudi Arabia continues to push up the cost of its oil exports to Asia, demand in China has been waning due to new lockdowns across the country. Further, as the U.S. and Russia offer more competitive oil prices, Saudi Arabian oil is looking less attractive.

Aramco has increased its Arab Medium and Heavy grades by around 20 and 30 cents a barrel, at the same time as the U.S. lowers the price of its similar Mars oil, and Russia takes the same approach with its Urals. This could drive buyers away unless Aramco responds to regular changes in demand levels across the region with fairer pricing.

As Aramco sees a positive trend for annual profits, in line with increasing demand and strong oil prices, it will have to balance these expectations with the ongoing volatility of the oil market in a world still affected by Covid and with companies pushing for greater competition while the oil market is still strong.