Saudi Aramco sees 12% profit drop, cuts dividend
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The news: The world’s largest oil company, Saudi Aramco, reported a 12% drop in 2024 profits and will cut its dividend as the price of oil continues to fall.
The numbers: The oil major posted net income for the year of USD106.25 billion ($170.27 billion), compared with USD121 billion in 2023. Aramco’s 2024 revenues of USD436 billion fell shy of 2023’s USD440.9 billion.
The company said it will pay a total dividend of just over USD85 billion, a sharp drop on the USD124 billion paid out the year prior.
The context: Subdued oil prices and production, nearing their lowest levels in three years, are focusing attention on the Aramco dividend and how the kingdom plans to fund multi-trillion dollar developments and economic transformation.
The USD500 billion NEOM straight line city project and the 2034 FIFA World Cup are key capital-intensive commitments for the kingdom, and alongside Crown Prince Mohammed bin Salman’s pledge to invest USD600 billion into the US, it is possible that Saudi Arabia may need to take on new debt to fund the projects.
Earlier this week, OPEC+ said it would proceed with plans to increase oil production from April, which is likely to push oil prices down further. The news sent brent crude prices tumbling on Monday.
What they said: Aramco president and CEO Amin H. Nasser said: “Global oil demand reached new highs in 2024, and we expect further growth in 2025. With dependable and more sustainable energy key to global economic growth, we continue to make progress on projects to maintain our maximum sustainable crude oil capacity, expand our gas capabilities, achieve further integration of our Upstream and Downstream businesses to capture additional value, and help mitigate greenhouse gas emissions.”
The sources: Saudi Aramco results, Bloomberg
