Aramco raises $5B on London bond market amid oil price slide

Saudi Aramco is going to the debt market again amid a slide in oil prices that has chopped the cost of the industry’s benchmark Brent crude almost in half over the past three years.

Aramco, the world’s largest oil company, said on Monday that it raised $5 billion in a London bond sale that was the U.K.’s largest this year and followed the sale of Islamic bonds a year ago that raised $6 billion.

The record borrowing should enable the state-owned oil colossus to continue generating the level of funding that the kingdom has been counting on to finance its drive to diversify the economy. 

The price of Brent crude has fallen 20% this year and 45% since June 2022. It was trading at $62 a barrel this morning.

Saudi Crown Prince Mohammed bin Salman has put the country on an expensive course of investing in massive infrastructure projects such as the $1 trillion-dollar Neom development, while  deepening its interests in a variety of industries including minerals, electric vehicles and sports.

At the same time, Saudi Arabia has tightened its dominance over OPEC+, pushing through a significant increase in production across the bloc of oil producers despite opposition from other powerful members such as Russia, Oman and Algeria, Bloomberg reports.