The Fort Worth Press - Saudi Aramco's quarterly profit drops 15% on low oil prices

USD -
AED 3.67306
AFN 67.000232
ALL 90.350124
AMD 387.090288
ANG 1.803403
AOA 911.999703
ARS 992.75005
AUD 1.509536
AWG 1.8
AZN 1.699428
BAM 1.793226
BBD 2.020336
BDT 119.578971
BGN 1.795425
BHD 0.376863
BIF 2895
BMD 1
BND 1.31667
BOB 6.92994
BRL 5.791097
BSD 1.000587
BTN 84.158972
BWP 13.324409
BYN 3.274804
BYR 19600
BZD 2.016999
CAD 1.38817
CDF 2844.000161
CHF 0.861798
CLF 0.03455
CLP 953.350148
CNY 7.102805
CNH 7.119295
COP 4415
CRC 513.542259
CUC 1
CUP 26.5
CVE 101.650276
CZK 23.25045
DJF 177.719714
DKK 6.84304
DOP 60.450122
DZD 133.036032
EGP 49.148102
ERN 15
ETB 121.09956
EUR 0.917445
FJD 2.24275
FKP 0.765169
GBP 0.769995
GEL 2.735029
GGP 0.765169
GHS 16.360062
GIP 0.765169
GMD 71.499173
GNF 8629.999729
GTQ 7.731099
GYD 209.530271
HKD 7.771095
HNL 25.070005
HRK 6.88903
HTG 131.681734
HUF 375.838011
IDR 15761.3
ILS 3.750985
IMP 0.765169
INR 84.103986
IQD 1310
IRR 42104.999976
ISK 136.620168
JEP 0.765169
JMD 158.106101
JOD 0.7093
JPY 152.094501
KES 129.000074
KGS 86.172398
KHR 4074.9999
KMF 452.502706
KPW 899.999774
KRW 1379.620045
KWD 0.30635
KYD 0.833922
KZT 488.942475
LAK 21939.999766
LBP 89599.999997
LKR 293.363651
LRD 191.850363
LSL 17.510301
LTL 2.95274
LVL 0.60489
LYD 4.810223
MAD 9.847013
MDL 17.862153
MGA 4614.999664
MKD 56.52856
MMK 3247.960992
MNT 3398.000028
MOP 8.01115
MRU 40.000038
MUR 46.030126
MVR 15.399577
MWK 1735.500496
MXN 20.116905
MYR 4.345499
MZN 63.902742
NAD 17.509729
NGN 1652.920052
NIO 36.774985
NOK 10.962497
NPR 134.654282
NZD 1.666735
OMR 0.385028
PAB 1.000706
PEN 3.76825
PGK 4.009497
PHP 58.295502
PKR 277.85022
PLN 4.003945
PYG 7880.549392
QAR 3.640602
RON 4.56449
RSD 107.358803
RUB 97.849528
RWF 1364
SAR 3.756514
SBD 8.306221
SCR 13.620414
SDG 601.49579
SEK 10.69729
SGD 1.316365
SHP 0.765169
SLE 22.725005
SLL 20969.496802
SOS 571.000069
SRD 34.906015
STD 20697.981008
SVC 8.755249
SYP 2512.530268
SZL 17.510407
THB 33.605976
TJS 10.657051
TMT 3.51
TND 3.098999
TOP 2.342097
TRY 34.34781
TTD 6.783235
TWD 31.920998
TZS 2693.372993
UAH 41.474075
UGX 3662.002824
UYU 41.690353
UZS 12814.99989
VEF 3622552.534434
VES 43.761074
VND 25345
VUV 118.722039
WST 2.801184
XAF 601.447787
XAG 0.029645
XAU 0.000367
XCD 2.70255
XDR 0.751676
XOF 600.48083
XPF 110.249832
YER 249.849752
ZAR 17.412702
ZMK 9001.200135
ZMW 26.842284
ZWL 321.999592
  • CMSC

    0.0600

    24.7

    +0.24%

  • GSK

    -0.4000

    36.57

    -1.09%

  • RBGPF

    5.4100

    66.41

    +8.15%

  • RELX

    0.7700

    47.83

    +1.61%

  • VOD

    0.1300

    9.45

    +1.38%

  • BTI

    0.2900

    35.4

    +0.82%

  • NGG

    0.5300

    64.98

    +0.82%

  • RIO

    0.4600

    65.47

    +0.7%

  • SCS

    0.0700

    12.32

    +0.57%

  • BCC

    -4.6000

    129.66

    -3.55%

  • BCE

    -0.3950

    28.725

    -1.38%

  • CMSD

    0.0200

    24.94

    +0.08%

  • RYCEF

    0.1500

    7.25

    +2.07%

  • AZN

    -5.7700

    65.66

    -8.79%

  • BP

    0.3050

    30.035

    +1.02%

  • JRI

    0.0000

    13.1

    0%

Saudi Aramco's quarterly profit drops 15% on low oil prices
Saudi Aramco's quarterly profit drops 15% on low oil prices / Photo: © AFP/File

Saudi Aramco's quarterly profit drops 15% on low oil prices

Energy giant Saudi Aramco reported a 15 percent year-on-year drop in third quarter profit on Tuesday, citing prices which have stayed low despite production cuts and war in the Middle East.

Text size:

The fall in net income to $27.56 billion from $32.58 billion in 2023 is the seventh consecutive quarterly drop for Aramco, one of the world's biggest companies by market capitalisation.

Aramco is the chief source of revenue for Crown Prince Mohammed bin Salman's Vision 2030 reform agenda, which aims to remodel the Gulf kingdom's crude-reliant economy.

The lower third quarter profit "was mainly due to the impact of lower crude oil prices and weakening refining margins", Aramco said in a statement to the Saudi stock exchange.

Following a series of output cuts since October 2022, the world's biggest crude oil exporter is currently producing roughly nine million barrels per day (bpd), well below its capacity of 12 million bpd.

Yet despite lower production, as well as widening conflict in the Middle East, prices have remained low because of concerns about market oversupply.

Brent crude was priced at around $75 per barrel on Tuesday -- much cheaper than Saudi Arabia's estimated fiscal break-even mark.

"Aramco delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment," chief executive Amin Nasser said in a statement.

The firm will maintain its $10.8 billion performance-based dividend for another quarter alongside its $20.3 billion base dividend, the statement said.

- 'No supply disruptions' -

Soaring energy prices following Russia's invasion of Ukraine allowed Aramco to post record profits in 2022, before they dipped by 25 percent last year.

Profits were down 14.5 percent in the first quarter of 2024 and 3.4 percent in the second quarter.

Israel's war against Hamas has drawn in Iran-backed groups from across the region and led to direct strikes between Israel and Iran, spurring fears about oil supply.

Yet while Brent rose above $80 per barrel in early October, it has not approached $96.2 -- the mark the International Monetary Fund has identified as break-even for the Saudi budget at current production levels.

"The markets appear to be dismissing geopolitical risk in the Middle East, so anything short of an actual supply disruption" will be unlikely to exert upward pressure on prices, said Amena Bakr, senior research analyst at Energy Intelligence.

"So far there have been no supply disruptions."

The year-on-year drop in profits "isn't coming as a surprise to the government which has already revised down revenue expectations for this year based on weakening oil markets", said Jamie Ingram, senior editor at the Middle East Economic Survey.

- 'Maximising prices' -

On Sunday, Saudi Arabia and seven other members of the OPEC+ group of oil-producing nations said they were extending a 2.2 million-barrel reduction announced in November 2023 by another month, until the end of December.

"When it comes to oil production policy, they'll be trying to assess what will ultimately bring in the most revenue," Ingram said.

"Is it maximising volumes or maximising prices? For now, the strategy remains the latter."

The government's stake in Aramco is around 81.5 percent, while the Saudi sovereign wealth fund, the Public Investment Fund, holds 16 percent.

Aramco is pushing to diversify from its core business, "investing big-time in renewable and hydrogen and carbon capture and storage" while also "making sure that we are growing our oil and gas activities and petrochemicals", Nasser told an investor forum in Riyadh last week.

The company's initial public offering in 2019, the biggest flotation in history, raised $29.4 billion, and a secondary offering this year of nearly 1.7 billion shares fetched $12.35 billion.

Aramco's profits help finance flagship projects including NEOM, the planned futuristic mega-city being built in the desert, a giant airport in Riyadh and major tourism and leisure developments.

The Saudi finance ministry has acknowledged that spending will outstrip revenue in the short term, and in September it projected a budget deficit of 2.3 percent of GDP in 2025 and for deficits to continue through 2027.

W.Knight--TFWP