Aramco’s 2024 profit is $106.25 billion, a 12% decline from the previous year, influenced by lower energy prices. Total revenues reached $436 billion, with dividend payments anticipated at $85.4 billion for the year. OPEC+ plans to increase oil production starting in April, raising concerns about further revenue impacts from declining oil prices.
Saudi Arabia’s state-owned oil company, Aramco, reported a profit of $106.25 billion for the year 2024, reflecting a 12% decline from the previous year due to reduced energy prices impacting revenue streams. This profit decrease poses challenges to Saudi Arabia’s vast development initiatives, including the ambitious NEOM project spearheaded by Crown Prince Mohammed bin Salman, which aims to reshape the desert with extensive infrastructural developments, including preparations for the 2034 FIFA World Cup.
In terms of financial performance, Aramco’s revenues totaled $436 billion, down from $440.88 billion in 2023. The annual profit for 2023 was $121 billion, also lower than the previous year, primarily driven by diminishing sales income alongside escalating operational costs. Aramco’s stock has seen a decline, trading at $7.33, compared to a high of $8.71 over the past year as oil prices continue to drop, with Brent crude currently valued at $73, reflecting a 10% dip this year.
The company enjoys a market valuation of $1.74 trillion, ranking it as the sixth most valuable global enterprise, trailing companies like Apple and Microsoft. For the fourth quarter, Aramco declared a dividend of $21.36 billion, which includes a modest performance dividend of $220 million. The expected total dividends for the year are estimated at $85.4 billion, indicating a significant reduction in returns for the Saudi monarchy.
Aramco’s results emerge amidst strategic discussions within OPEC+, which concluded a decision to augment oil production starting in April, marking the first production increase since 2022, anticipated to further depress oil prices. Following these developments, Trump’s critiques of the cartel continue to resonate, heightening the scrutiny on oil prices and market supply dynamics.
Saudi Arabia’s massive oil deposits situated close to the surface allow for economical crude production, with every $10 increase in oil price yielding an additional $40 billion annually for the nation. While the Saudi government retains majority ownership of Aramco, the company publicly listed a fraction of its shares in late 2019, suggesting the possibility of further public offerings in the future.
In summary, Saudi Aramco’s reported profit for 2024 reflects a significant decline attributed to lower energy prices, affecting the kingdom’s large-scale developmental projects. With OPEC+ planning to increase oil production, market dynamics may further constrain Saudi revenues, necessitating new debt to support ambitious initiatives like NEOM and infrastructure investments. The outlook for Aramco remains challenging with geopolitical factors and evolving energy markets.
Original Source: apnews.com
