Saudi Aramco Sees 12% Drop in Profit to $106 Billion amid Lower Energy Prices
TEHRAN (Tasnim) – Saudi Aramco reported a net profit of $106.25 billion in 2024, a 12% decline from the previous year, as lower energy prices weighed on earnings.
A filing on Riyadh’s Tadawul stock exchange showed that the state-owned oil company, formally known as Saudi Arabian Oil Co., generated revenues of $436 billion last year.
Aramco had posted a $121 billion profit in 2023, down from its record earnings in 2022, as weaker oil prices continued to impact revenue.
“The decrease was primarily driven by lower revenue and other income related to sales, higher operating costs, as well as lower finance and other income,” Aramco stated in its filing.
Shares of Aramco traded around $7.33 on Tuesday, down from a 12-month high of $8.71, as oil prices declined. Benchmark Brent crude stands at $73 per barrel, down 10% since the start of the year.
Despite the drop, Aramco remains one of the world’s most valuable companies, with a market capitalization of $1.74 trillion, ranking sixth behind Apple, Microsoft, NVIDIA, Amazon, and Alphabet, Google’s parent company.
The company will distribute $21.36 billion in dividends for the fourth quarter, including a $220 million performance dividend. It expects to pay a total of $85.4 billion in dividends this year, a notable reduction from previous years.
“Our strong net income and increased base dividend illustrate Aramco’s exceptional resilience,” CEO and President Amin H. Nasser said in a statement.
Aramco’s earnings report comes as OPEC+, an alliance of oil-producing nations, agreed in an online meeting on Monday to proceed with its first production increase since 2022, set to take effect in April. The move is expected to exert further downward pressure on oil prices.
The decision follows criticism from US President Donald Trump regarding OPEC’s policies.
Saudi Arabia, home to vast and easily accessible oil reserves, remains one of the lowest-cost crude producers globally. According to the Institute of International Finance, a $10 increase in oil prices translates to an additional $40 billion in annual revenue for the kingdom.
However, weaker oil prices have strained government revenues, potentially impacting Crown Prince Mohammed bin Salman’s $500 billion NEOM megacity project. Saudi Arabia is also preparing to host the 2034 FIFA World Cup, requiring significant infrastructure investments.
The Saudi government retains a majority stake in Aramco. While the company publicly listed a small portion of its shares in late 2019, it has considered further offerings in the future.
