Saudi Aramco has announced a significant drop in its third-quarter net income, marking a 23.2% decrease compared to the same period last year. The decline, which saw net income fall to $32.6 billion from $42.4 billion, is primarily attributed to the impact of lower crude oil prices and reduced sales volumes, according to the world’s largest oil company by market capitalization and production.
This reduction in profits comes as the Saudi state oil giant, known for being the world’s leading crude oil exporter, implemented a voluntary 1 million barrels per day (bpd) output cut from July onwards. The aim was to stabilize the oil market, with the commitment to maintain this additional cut until the end of the current year reiterated over the weekend.
Consequently, Saudi Arabia’s daily crude oil production has hovered around 9 million barrels since the implementation of the voluntary reduction, leading to a significant drop in crude oil exports to the lowest levels in over two years.
The combination of decreased production and export levels, along with lower crude oil prices during the period from July to September, resulted in a significant drop in Aramco’s free cash flow. The company reported a decline to $20.3 billion in the third quarter of 2023, down from $45.0 billion in the same period last year.
Despite the financial challenges, Saudi Aramco remains committed to distributing a base dividend of $19.5 billion for the quarter, which is slated to be paid in the fourth quarter. In line with this commitment, the company had already paid the first performance-linked dividend of $9.9 billion in the third quarter, with a second distribution of the same amount scheduled for the fourth quarter. These dividends are contingent on the combined results for the full-year 2022 and the first nine months of 2023.
Aramco’s President and CEO, Amin Nasser, emphasized the company’s commitment to continued investment across the hydrocarbon chain, leveraging advanced technologies to optimize operations and promote the development of emerging energy solutions.
He highlighted the importance of a balanced and realistic energy transition plan that considers the needs of all global energy consumers to avoid disparities among different regions.
