Saudi Arabia: Aramco Profit Falls 38%

Major Saudi oil player Aramco reported a nearly 38% drop in profits in the second quarter of 2023.

The reasons lie in the drop of oil prices and the decline in the margins of oil products and the chemical industry. The net profit of the national hydrocarbon company of Saudi Arabia for April-June amounted to 112.81 billion rials ($30.07 billion) against 181.64 billion rials ($48.4 billion) in the same quarter of 2022.

It is worth noting that the 2022/2023 comparison is influenced by the fact that last year prices rose sharply as a result of the conflict outbreak in Ukraine – profit growth year on year reached 90%. The drop in net income does not affect Aramco’s dividend policy, which confirmed the payment of basic dividends in the amount of 19.5 billion in the first quarter and another 19.5 billion in the second quarter.

“Our excellent results reflect our resilience and our ability to adapt to market cycles,” said Amin Nasser, CEO of Aramco. “Our medium- and long-term vision remains unchanged. Taking into account the outlook for a recovery in the global economy as a whole and an increase in activity in the aviation sector, ensuring energy security will require continued investment in energy projects. At the same time, we remain optimistic about the potential of new technologies to reduce our operational emissions.”

Last year, Brent was quoted at $113 a barrel, followed by the price collapse due to economic uncertainty and oversupply. So, Moscow and Riyadh have tried to support the prices that are now rising and will probably keep rising, given the recent decision by Saudi Arabia to cut production by 1 million barrels per day in September as well.