Due to Oil Price Drop and Production Cuts... Saudi Aramco's Net Profit Down 24.7% Last Year

The net profit of Saudi Arabia's state-owned Aramco, the world's largest oil company, fell sharply last year due to the decline in oil prices and crude oil production cuts.

According to AFP on the 10th (local time), Aramco announced that its net profit last year was 454.7 billion Saudi Riyals (approximately 121.25 billion USD / 160.05 trillion KRW), down 24.7% from the previous year.

[Image source=Reuters Yonhap News]

Aramco explained, "This decrease was mainly due to the decline in crude oil prices, reduced sales volume, and weakening margins in the refining and chemical sectors." Armin Nasser, Aramco's Chief Executive Officer (CEO), said, "Last year, we achieved the second highest net profit in history," adding, "Despite economic headwinds, we showed healthy cash flow and high profitability." He also stated, "We increased shareholder dividends by 30% compared to the previous year in 2023."

In February 2022, Russia launched a full-scale invasion of Ukraine, triggering a global energy crisis centered in Europe. That year, oil prices exceeded $130 per barrel, reaching an all-time high. In the same year, Aramco's net profit surged about 46% compared to $110 billion (approximately 145.2 trillion KRW) in 2021.

However, last year, oil prices fell back to $85 per barrel. This year, oil prices are expected to approach the $90 level. The Saudi government needs to secure massive funds by maintaining high oil prices for economic structural reforms toward a post-oil era, including the mega real estate development project NEOM and tourism resource development.

CEO Nasser added, "Currently, China's crude oil demand is steady and increasing," and "We are closely monitoring investment opportunities in China."