Aramco, Saudi Arabia’s state-owned oil company, reported a 12% drop in net profit for 2024 on Tuesday. After earning $121.3 billion in 2023, Aramco earned $106.3 billion in 2024, resulting in a lower payout for the kingdom, which relies heavily on oil revenue.
The company attributed the decline to weaker oil prices, higher operating costs, and lower income from sales. Aramco’s realized oil price fell to $80.2 per barrel in 2024 from $83.6 in 2023.
Despite financial challenges, Aramco CEO Amin H. Nasser expressed confidence, stating, “Our strong net income and increased base dividend illustrate Aramco’s exceptional resilience.”
Also on Tuesday, Saudi Arabia and the rest of the OPEC+ alliance of oil-exporting countries decided to increase oil production starting in April, a move that could push oil prices lower. That comes after the OPEC+ countries decided to cut production in 2023 in order to boost prices.
Oil revenue
Aramco faces ongoing uncertainty as global supply of oil grows and demand remains unpredictable. The company’s market value stands at $1.74 trillion, ranking it among the world’s most valuable firms, but its stock has declined alongside oil prices.
According to the International Monetary Fund, oil accounts for more than half of Saudi Arabia’s government revenue. Even as Aramco reports lower earnings, Saudi Crown Prince Mohammed bin Salman is moving forward with multi-trillion-dollar development projects, including the $500 billion NEOM megacity and infrastructure investments for the 2034 FIFA World Cup.