Oil giant Saudi Aramco’s 1st quarter profit down 20% to $31 billion


DUBAI, UAE: Oil giant Saudi Aramco on Tuesday reported first-quarter profit of $31.88 billion, down nearly 20% from the same period last year, as energy prices fell on global recession concerns.
The company officially known as the Saudi Arabian Oil Co. attributed the decline — compared to $39.47 billion in the year-ago quarter — to lower crude oil prices. Aramco made a profit of $30.73 billion in the fourth quarter of last year.
“The results reflect Aramco’s continued high reliability, focus on costs and our ability to respond to market conditions by generating strong cash flows and continuing to strengthen the balance sheet,” said Amin H. Nasser, Aramco’s President and CEO, in a statement .
Aramco said separately that it “believes it is well positioned to withstand fluctuating commodity prices through its low-cost upstream production.” Benchmark Brent crude was trading around $76 a barrel early Tuesday, down from a high of $125 last year.
Saudi Arabia’s vast oil reserves, located near the surface of its desert expanse, make it one of the world’s least expensive places to produce crude oil. For every $10 increase in the price of oil, Saudi Arabia earns an additional $40 billion a year, the government said Institute for International Finance.
In March, Aramco announced it made $161 billion last year, claimed the highest annual profit on record by a public company, and drew immediate criticism from activists amid concerns about climate change.
While saying that Aramco “is working to further reduce the carbon footprint of our operations,” Nasser remained bullish on global demand for crude oil and natural gas.
“We are also driving our capacity expansion and our long-term perspective remains unchanged as we believe oil and gas will remain critical components of the global energy mix for the foreseeable future,” he added.
Those earnings come as energy prices rose after Russia launched its war against Ukraine in February 2022, with sanctions restricting the sale of Moscow’s oil and natural gas to western markets.
However, oil prices have fallen in recent weeks on fears of an impending recession as central banks in the US and elsewhere raise interest rates to try to tame inflation. This comes even after OPEC+, a group of countries including the cartel and countries outside the cartel like Russia, announced surprise production cuts totaling up to 1.15 million barrels in April. In the recent OPEC+ cuts, US President Joe Biden has warned of potential “consequences” for Riyadh, despite his national security adviser just visiting the kingdom and meeting with the Saudi crown prince Mohammed bin Salman.
Shares of Aramco traded at $9.55 per share on Riyadh’s Tadawul Stock Exchange on Monday, giving the oil company a valuation of $2.1 trillion and ranking it behind only Apple and Microsoft for the world’s highest market cap. Only a fraction of its value, less than 2%, is traded on the stock exchange. The Saudi government owns 90% of the company, around 8% is held by Saudi sovereign wealth funds.
Separately, Aramco announced on Tuesday that it would issue performance-related dividends to shareholders in addition to the dividends it’s already offering. Its base dividend for the fourth quarter of last year was $19.5 billion, the highest in the world for a public company.

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