Staff Reporter
Saudi Arabia’s state-owned oil powerhouse, Aramco, announced a profit of $106.25 billion for 2024, reflecting a 12% decrease from the previous year, attributed to declining energy prices.
In a filing with Riyadh’s Tadawul stock exchange, Aramco, officially known as the Saudi Arabian Oil Co., reported revenues totaling $436 billion for the year.
This comes after the company posted a profit of $121 billion in 2023, which was already down from a record high in 2022 due to similar price pressures.
“The decline in profit was primarily driven by reduced revenue and other income related to sales, increased operating costs, and lower finance and other income,” Aramco stated in its report.
On Tuesday, shares of Aramco traded at approximately $7.33 each, down from a yearly peak of $8.71. The stock has seen a decline over the past year, closely following the drop in oil prices, with benchmark Brent crude currently priced at $73, down 10% this year.
Saudi Arabia’s Aramco boasts a market value of $1.74 trillion, ranking it as the sixth-most valuable company in the world, following industry giants Apple, Microsoft, NVIDIA, Amazon, and Alphabet, the parent company of Google.
For the fourth quarter, Aramco plans to distribute dividends totaling $21.36 billion, which includes a modest performance dividend of $220 million. The company anticipates paying out $85.4 billion in dividends this year, a significant reduction from previous amounts.
The Aramco results arrive as OPEC+, a coalition of the oil cartel and other oil-producing nations, convened online on Monday and agreed to increase oil production starting in April. This marks the first production increase by the group since 2022, a move likely to further drive down oil prices.
Saudi Arabia’s extensive oil reserves, located near the surface of its desert landscape, make it one of the most cost-effective places in the world to produce crude oil. According to the Institute of International Finance, for every $10 increase in the price of a barrel of oil, Saudi Arabia stands to gain an additional $40 billion annually.
However, declining energy prices have impacted the kingdom’s revenues, affecting Crown Prince Mohammed bin Salman’s ambitious $500 billion plan to develop the futuristic city of NEOM.
The Saudi government maintains ownership of the majority of Aramco’s shares. The company publicly listed a small portion of its value in late 2019 and has been considering offering more shares in the future.
