Dubai, United Arab Emirates (AP) — Saudi oil giant Aramco posted a third-quarter profit of $27.5 billion, a 15% decline compared to the same period last year, as lower oil prices impacted revenue.
Aramco, officially known as the Saudi Arabian Oil Co., reported $111.1 billion in revenue for the third quarter, down from $113 billion a year earlier, as per the company’s filing on the Riyadh Tadawul stock exchange. Last year, third-quarter profits reached $32.5 billion.
According to Aramco, the profit drop was “mainly due to the impact of lower crude oil prices and weakening refining margins.” For the first nine months of 2024, Aramco’s profit totaled $83.9 billion, down from $94.5 billion in the previous year.
Oil prices have seen a dip recently, with Middle Eastern tensions easing slightly and China’s economy slowing down. On Tuesday, Brent crude hovered around $75 per barrel.
For Q3, Aramco announced dividends of $20.28 billion along with a performance-linked dividend of $10.77 billion, aiming for a total annual dividend payout exceeding $124 billion.
While a small portion of Aramco’s shares are publicly traded on Tadawul, the Saudi government retains most ownership, supporting the country’s spending and the wealth of the Al Saud royal family. Aramco’s market value stands at $1.7 trillion, making it the world’s sixth-most valuable company, following tech giants like Apple, NVIDIA, Microsoft, Alphabet, and Amazon.
In 2023, Aramco’s annual profit was $121 billion, reflecting a decrease from its record 2022 earnings amid falling energy prices. Despite its immense oil resources, which are among the world’s cheapest to produce, Saudi Arabia is increasingly looking to diversify. Crown Prince Mohammed bin Salman aims to reduce the kingdom’s reliance on oil through projects like the $500 billion futuristic city, Neom. However, lower oil prices may prompt Saudi Arabia to scale back some of these ambitious projects as it faces potential budget deficits.
Environmental activists continue to criticize Aramco’s significant profits in light of global concerns about fossil fuels and their impact on climate change.