By Akinsuroju Olubunmi
Saudi Aramco’s 2023 profits fall by 24.7%
Saudi Aramco announced a 24.7 percent decline in profits for 2023 compared to the previous year due to lower oil prices and production cuts. The oil giant reported a net income of 454.7 billion Saudi riyals ($121.25 billion) in 2023, down from 604.01 billion Saudi riyals ($161.07 billion) in 2022.
The drop in profits was primarily attributed to lower crude oil prices, reduced volumes sold, and declining refining and chemicals margins. This decline comes despite record profits in 2022, which marked the kingdom’s first annual budget surplus in nearly a decade.
Aramco CEO Amin H. Nasser expressed optimism despite the challenges, highlighting the company’s resilience and agility in maintaining healthy cash flows and profitability. He also noted a 30% increase in total dividends paid in 2023 compared to the previous year.
The decrease in profits was exacerbated by the drop in oil prices to $85 per barrel last year, resulting in significant year-on-year profit declines across multiple quarters. However, prices are expected to rise to around $88 per barrel in 2024, with potential to reach $90 per barrel by the end of the year.
To mitigate the impact of lower oil prices, Saudi Arabia extended its oil supply cuts of one million barrels per day through June. These cuts were first announced in June 2023 as part of efforts to stabilize oil markets amid global economic uncertainty.
Despite the challenges in the oil market, Saudi Arabia continues to pursue economic diversification and investment in non-oil sectors as part of its Vision 2030 initiative. Aramco remains a key revenue source for the kingdom’s ambitious economic reform program.
In line with this, the kingdom transferred an additional eight percent stake in Aramco to firms owned by the Public Investment Fund, bringing the cumulative shares transferred to 16 percent. This move reflects Saudi Arabia’s commitment to leveraging its oil assets for long-term economic growth and development.
The keyphrases are:
1. **Saudi Aramco**
2. **profits**