Oil giant Saudi Aramco on Sunday reported its profits surged to $161 billion in 2022, a record result for an energy firm crucial to the kingdom's economy, driven by higher crude prices, increased volumes sold and improved margins for refined products.

The firm, known formally as the Saudi Arabian Oil Co., said in its annual report that the profit represented "its highest annual profits as a listed company."

That came off the back of energy prices rising after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Moscow's oil and natural gas in Western markets.

Aramco also hopes to increase its production to take advantage of market demand, raising the billions needed to pay for Crown Prince Mohammed bin Salman's (MBS) plans to develop futuristic cityscapes to pivot Saudi Arabia away from oil.

However, those plans come despite growing international concerns over the burning of fossil fuels accelerating climate change.

"Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real – including contributing to higher energy prices," Saudi Aramco CEO and President Amin H. Nasser said in a statement.

Profits rose 46.5% when compared to the company's 2021 results of $110 billion. It earned $49 billion in 2020 when the world faced the worst of the coronavirus pandemic lockdown, travel disruptions and oil prices briefly going negative.

Aramco put its crude production at around 11.5 million barrels a day in 2022 and said it hoped to reach 13 million barrels a day by 2027.

To boost that production, it plans to spend as much as $55 billion this year on capital projects.

Aramco also declared a dividend of $19.5 billion for the fourth quarter of 2022, to be paid in the first quarter of this year.

Aramco's results, viewed as a bellwether for the global energy market, mirror the huge profits seen at those of U.K. energy giant BP, America's Exxon Mobil, Shell and others in 2022.

Benchmark Brent crude oil now trades around $82 a barrel, though prices had reached over $120 a barrel back in June. Aramco, whose fortunes hinge on global energy prices, announced a record $42.4 billion profit in the third quarter of 2022 off the back of that price spike.

Those high prices have further strained ties between the 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 gasoline prices lower for voters – making public the typically behind-the-scenes negotiations common in the region.

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" are yet to be seen as Saudi Arabia and Iran went to China to strike a diplomatic deal Friday. U.S. gasoline prices now stand on average at $3.47 a gallon, down just about a dollar from last year.

For the kingdom, higher crude oil prices can help fuel the dreams of Prince Mohammed, including his planned $500 billion futuristic desert city project called Neom. However, they also run against the fears of activists over climate change, particularly as the United Nations' COP28 climate talks are scheduled to begin this November in the neighboring United Arab Emirates.

Saudi Arabia has pledged to have net-zero carbon emissions by 2060, like China and Russia, though its plans to reach that goal remain unclear. Aramco's earnings report noted it started a $1.5 billion Sustainability Fund in October and plans a carbon-capture-and-storage facility as well.

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 $10 rise in the price of a barrel of oil, Saudi Arabia stands to make an additional $40 billion a year, according to the Institute of International Finance.

Shares in Aramco stood at $8.74 on Riyadh's Tadawul stock exchange before it opened Sunday. That is down from a high of $11.55 a share in the last year. However, that current price still gives Aramco a valuation of $1.9 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. Saudi Aramco publicly listed a sliver of its worth back in late 2019.