Saudi oil giant Aramco yesterday reported a 15% drop in third-quarter net profit, compared to the same period last year, due to low oil prices and a reduction in production. .
Net profit amounted to $27.56 billion compared to $32.58 billion in the third quarter of 2023, a decline that “mainly reflects the impact of lower volumes of crude oil sold and weakening margins of refining,” the company said in a statement published on the Saudi Stock Exchange.
Saudi Arabia, the world's top crude exporter, currently produces around 9 million barrels per day (mbd), well below its capacity of 12 mbd. The relatively low figure reflects a series of production declines dating back to October 2022. “Aramco delivered strong net income and generated strong free cash flow during the third quarter, despite weak oil prices,” it said. yesterday in a separate press release its general director, Amin Nasser. The company is working to “strengthen (its) position as a major global energy and petrochemicals player,” he added.
Aramco is the main source of revenue for Crown Prince Mohammed bin Salman's Vision 2030 reform program, which aims to prepare the kingdom for a post-oil era. As a reminder, profit for the first quarter of this year fell by 14.5% and that of the second quarter by 3.4%. The annual drop in Aramco's profit “does not surprise the government, which has already lowered its revenue forecasts for this year due to the weakness of the oil markets”, estimates Jamie Ingram, of the specialist publication Middle East Economic Survey.
“In terms of oil production policy, they will seek to evaluate what will generate the most revenue in the end. Should we maximize volumes or prices? For the moment, the strategy remains focused on prices,” he assures.
As an indication, the Saudi state's stake in Aramco, one of the largest companies in the world in terms of market capitalization, is approximately 81.5%. Aramco's 2019 partial IPO, the largest in history, raised $29.4 billion, and a secondary offering this year of nearly 1.7 billion shares raised 12 .35 billion dollars.
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