Saudi Aramco reveals lower profits amid changing oil market dynamics

(MENAFN) In a recent announcement, the Saudi Aramco Oil Group disclosed a notable 24.7 percent decrease in its net profits for the year 2023 compared to the previous year. This decline, attributed to a combination of reduced oil prices and quantities sold, marks a significant contrast to the record-breaking profits recorded in 2022. Saudi Arabia, known as the world's largest exporter of crude oil, has been strategically curbing its production until June, further impacting the dynamics of the global oil market.

Despite this downturn, the colossal conglomerate, predominantly state-owned and ranked as the fourth largest company globally by market value, reported a net income of 454.7 billion Saudi riyals (USD121.25 billion) for 2023. While this figure represents a substantial decrease from the previous year's USD161.07 billion, the company emphasized that it still stands as the second-highest net income in its history.

In a statement published on the Saudi Stock Exchange (Tadawul) website, Saudi Aramco attributed the decline in profits primarily to the downturn in crude oil prices and quantities sold, as well as decreases in the prices of refined and chemical products. Amin Nasser, the company's CEO, expressed gratitude for the strong profits, robust cash flows, and high levels of profitability achieved amidst challenging global economic conditions. Despite the decline in profits, Nasser highlighted a 30 percent year-on-year increase in total dividends paid to shareholders for the year 2023.

The contrast between the 2023 profits and the record-breaking figures of 2022, totaling USD161.1 billion, underscores the volatility and sensitivity of the oil market to geopolitical events. The unparalleled surge in oil prices in 2022, attributed to the conflict in Ukraine, saw prices exceeding USD130 per barrel at their peak, contributing significantly to the record profits of the previous year. However, the subsequent normalization of oil prices in 2023 has led to a recalibration of expectations for Saudi Aramco and the broader oil industry.

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