Saudi Aramco approaches Apple to become the world’s most valuable business

Saudi Aramco approaches Apple to become the world's most valuable business

Saudi Aramco, the world’s largest oil exporter, is closing the market capitalization gap with iPhone maker Apple to become the most valuable corporation in the world. On Tuesday, the market capitalization of Aramco, which was trading at 45.95 Saudi riyals ($12.25) a share, reached 9.19 trillion riyals ($2.45tn). During the day, it momentarily outperformed the Cupertino-based technology behemoth’s market price. Aramco’s stock has risen over 30% since January 2.

Saudi Aramco approaches Apple to become the world’s most valuable business

However, prices are expected to moderate to $92 next year — well above the five-year average of $60 a barrel, the Washington-based lender said. Saudi Aramco shares are becoming a favourite investment for many traders as the outlook for oil prices remains well supported for the next few years. The surge in Aramco is “purely driven by higher oil prices” and this trend will not stay for long, said Naeem Aslam, chief market analyst at broker Avatrade. “In the short term, this trend will prevail … but we know that there is a lot of froth here and once the bubble will burst, it will not be so good for Aramco … what the company needs to do now is to make sure to use the current capital and invest in future,” Mr Aslam told The National. China, the world’s largest importer of oil, has introduced movement restrictions in its largest city, Shanghai, as well as in the capital Beijing due to an outbreak of Covid-19.

Aramco has benefited from high oil prices that are up about 60 per cent since last year on higher demand and supply concerns due to limited capacity of producing countries. In April, both global benchmarks, Brent and the West Texas Intermediate, posted their fifth straight monthly gain. Owing to the Ukraine war-related trade and production disruptions, the price of Brent — the global benchmark for two thirds of the world’s oil — is expected to average $100 a barrel this year, its highest level since 2013, after increasing more than 40 per cent annually, a report released by World Bank last month showed.

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