Saudi Aramco, the oil giant, surpasses Apple as the most important company in the world
- On Wednesday, Saudi Aramco’s market capitalization surpassed that of technology giant Apple.
- The oil market has been boosted by fears of a supply crunch caused by the war in Ukraine.
- Tech stocks were hit by growth fears on the back of higher interest rates.
Saudi Aramco has overtaken tech giant Apple to become the world’s most valuable company, after oil producers’ shares surged past $2.4 trillion.
It fell to $2.37 trillion after its share price fell 5.2% on Wednesday amid a dip in technology shares. Meanwhile, the market value of state-controlled Aramco was 9.1 trillion Saudi riyals ($2.43 trillion).
The value of the two companies could change again due to fluctuations in share prices, but Wednesday’s move underscores broader trends in the global economy.
The energy market is booming. The war in Ukraine has driven up prices due to sanctions, boycotts against Russia, and supply chain challenges. The US benchmark West Texas Intermediate traded around $105 a barrel on Thursday, while the international benchmark Brent crude was around $107 a barrel. Both grades are up 40% since the start of the year.
This more than doubled Aramco’s net profit to $110 billion in 2021. Meanwhile, Apple warned of supply chain constraints in its latest earnings release. Meanwhile, investors are fleeing tech stocks over fears that rising benefits will dampen future earnings.
Aramco’s share price in the Saudi stock market has risen by about 30% this year so far. In contrast, Apple’s stock price is down about 20% since the start of the year.