Oil giant Saudi Aramco’s 1st quarter profit down 20 per cent to $31B

DUBAI, United Arab Emirates –

Oil large Saudi Aramco reported a first-quarter revenue on Tuesday of $31.88 billion, down almost 20% from the identical interval final yr as vitality costs have sunk over international recession considerations.

The agency identified formally because the Saudi Arabian Oil Co. blamed the drop — in comparison with $39.47 billion in the identical quarter final yr — on the decrease crude oil costs. Aramco made a $30.73 billion revenue within the fourth quarter of final yr.

“The results reflect Aramco’s continued high reliability, focus on cost and our ability to react to market conditions as we generate strong cash flows and further strengthen the balance sheet,” Aramco President and CEO Amin H. Nasser stated in an announcement.

Aramco individually stated that it “believes it is well positioned to withstand fluctuating commodity prices through its low-cost upstream production.” Benchmark Brent crude traded early on Tuesday round $76 a barrel, down from a excessive of $125 within the final yr.

Saudi Arabia’s huge oil sources, situated near the floor of its desert expanse, make it one of many world’s least costly locations to supply crude. For each $10 rise within the value of a barrel of oil, Saudi Arabia stands to make a further $40 billion a yr, in line with the Institute of International Finance.

In March, Aramco introduced incomes $161 billion final yr, claiming the highest-ever recorded annual revenue by a publicly listed firm and drawing fast criticism from activists amid considerations about local weather change.

While saying Aramco was “working to further reduce the carbon footprint of our operations,” Nasser remained bullish on the world’s want for crude and pure fuel.

“We are also moving forward with our capacity expansion, and our long-term outlook 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 got here off the again of vitality costs rising after Russia launched its conflict on Ukraine in February 2022, with sanctions limiting the sale of Moscow’s oil and pure fuel in Western markets.

However, oil costs have sunk in current weeks amid fears of a coming recession as central banks within the U.S. and elsewhere increase rates of interest to attempt to tame inflation. That’s even after OPEC+, a bunch of nations together with the cartel and people exterior it like Russia, introduced shock manufacturing cuts in April totalling as much as 1.15 million barrels. Recent OPEC+ cuts have seen U.S. President Joe Biden warn of potential “consequences” for Riyadh, regardless that his nationwide safety adviser simply visited the dominion and met with Saudi Crown Prince Mohammed bin Salman.

Aramco inventory traded at $9.55 a share on Riyadh’s Tadawul inventory alternate at shut Monday, giving the oil agency a $2.1 trillion valuation and placing it solely behind Apple and Microsoft for the best market capitalization on the earth. Just a sliver of its price, beneath 2%, is traded on the alternate. The Saudi authorities holds 90% of the corporate, with about 8% held by Saudi sovereign wealth funds.

Separately Tuesday, Aramco introduced it might start issuing performance-based dividends to stockholders, on prime of the dividends it already presents. Its base dividend within the fourth quarter of final yr was $19.5 billion, rating it as the best on the earth for a publicly traded agency.