Saudi Aramco reported a 24.7% drop in profit for 2023 compared to the previous year, a result of lower oil prices and production cuts, AFP reported.
The oil giant said in a filing to the Saudi stock exchange that net income reached 454.7 billion Saudi riyals ($121.25 billion) in 2023, compared with 604.01 billion Saudi riyals ($161.07 billion . dollars) in 2022.
"The decrease mainly reflects the impact of lower crude oil prices and lower volumes sold, as well as weakening margins in refining and chemicals," Aramco said.
Russia's invasion of Ukraine in February 2022 sent oil prices soaring, peaking at over $130 a barrel that year.
Aramco reported what it described as record profits for 2022, giving the kingdom its first annual budget surplus in nearly a decade.
"In 2023, we achieved the second highest net profit in our history. Our resilience and flexibility contributed to healthy cash flows and high levels of profitability despite the backdrop of economic headwinds," Aramco Chief Executive Officer Amin H. said in a statement. Nasser.
"We also delivered for our shareholders with a 30% increase in the total amount of dividends paid in 2023," he added.
Last year, prices fell to $85 a barrel, causing Aramco's profit to fall 23% year-on-year in the third quarter, 38% in the second quarter and 19.25% in the first quarter last year.
Prices are expected to rise to around $88 a barrel this year, partly due to global uncertainty sparked by the war between Israel and Hamas, Riyadh-based firm Jadwa Investment said in a report published in October.
They could reach $90 per barrel by the end of 2024, Jadwa Investment said.
Analysts say the kingdom needs an oil price of around $80 a barrel to balance its budget, although it can get away with cutting production and increasing costs.
The world's biggest crude exporter said it was extending a one-million-barrel-a-day oil supply cut until June.
Riyadh first announced its voluntary cut after the OPEC+ meeting in June 2023.
It followed the decision by several OPEC+ members in April 2023 to voluntarily cut production by more than one million barrels a day - a surprise move that briefly supported prices but failed to lead to a lasting recovery.
The kingdom's daily production is now approximately 9 million barrels per day, well below its announced daily capacity of 12 million barrels per day.
Under Crown Prince Mohammed bin Salman, who is the de facto ruler, Saudi Arabia has sought to open up and diversify its oil-dependent economy, spending heavily on much-hyped projects such as a futuristic metropolis known as NEOM.
Aramco is the main source of revenue for Prince Mohammed's ambitious economic reform program known as Vision 2030.
On March 7, the kingdom announced it had transferred an additional 8% of Aramco shares to firms owned by the kingdom's Public Investment Fund (PIF).
With this transfer, the cumulative amount of shares transferred to PIF, one of the largest sovereign wealth funds in the world, and its subsidiaries reached 16%.
The stake is worth approximately $164 billion at the company's current market capitalization, an Aramco media official said. /BGNES
