Hacker News Reader

Comment by oooglaaa | Hacker News Reader

That’s insane. That’s more than Apple, Amazon, and Alphabet’s 2017 net income combined.

How does a commodity business (oil and gas) generate so much profit?

Unlike (almost) every other business on earth where you have to do work and compete with peers to make a profit on your efforts, all the value of oil is sitting in the ground underneath them. Oil wealth is just luck of being born on top of the right geology.

And being part of an extremist tribe who were useful to the Brits/Americans versus the Ottomans in World War 1, who then continued to provide a “stable source” of oil. Stable because they stamped out any sort of democracy or society with freedoms that would allow anyone to object to their arrangements with the West, in exchange for one family of the tribe to become extremely wealthy.

Extract and refine it cheaply and then do logistics and shipping better. If you can do that and have enough, everyone will buy.

Oil/energy companies are still some of the most valuable in the world.

EDIT: also, demand is sky high. And OPEC works to manage our prices for economic stability.

> How does a commodity business (oil and gas) generate so much profit?

OPEC.

Getting oil out of the desert costs very little. A couple of bucks a barrel. Current market price was 80 bucks last I checked. Margin.

>That’s insane. That’s more than Apple, Amazon, and Alphabet’s 2017 net income combined.

That's not insane, that's false. Just Apple's 2017 net income was $48.35B [1], more than the $45B in the parent comment.

[1] https://investor.apple.com/investor-relations/sec-filings/se...

The parent comment figure was for the first half of the year. In other words, Aramco had a net income of $34B in just six months of business.

Reply on news.ycombinator.com