Oil giant Saudi Aramco has announced it earned a $US161 billion ($245 billion) profit last year.

The firm, formally known as the Saudi Arabian Oil Co, said in its annual report that higher crude oil prices propelled its profits, which were a 46 per cent jump from a year earlier.

It made the announcement on Riyadh’s Tadawul stock exchange on Sunday.

In 2021, Aramco declared profits of $US110 billion, as compared to $US49 billion 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 about $US82 a barrel, though prices had reached more than $US120 a barrel back in June.

Aramco, whose fortunes hinge on global energy prices, announced a record $US42.4 billion profit in the third quarter of 2022 off the back of that price spike.

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

Before the midterm elections in November, the kingdom said the Biden administration sought to delay a decision by OPEC and allies including Russia to cut production that could have kept petrol prices lower for voters – making public the typically behind-the-scenes negotiations common in the region.

US President Joe Biden had warned the kingdom that “there’s going to be some consequences for what they’ve done” in terms of oil prices.

However, those consequences have yet to be seen as Saudi Arabia and Iran went to China to strike a diplomatic deal on Friday.

US petrol prices now stand on average at $US3.47 ($5.28) a gallon, down just about $US1 from last year.

Saudi Arabia’s vast oil resources, located close to the surface of its desert expanse, make it one of the world’s least expensive places to produce crude.

For every $US10 rise in the price of a barrel of oil, Saudi Arabia stands to make an additional $US40 billion a year, according to the Institute of International Finance.

Shares in Aramco stood at $US8.74 on Riyadh’s Tadawul stock exchange before it opened on Sunday.

That’s down from a high of $US11.55 a share in the past year.

However, that current price still gives Aramco a valuation of $US1.9 trillion, making it the world’s second-most valuable company behind only Apple.

The Saudi government still owns the vast majority of the firm’s shares.

-Reuters