Saudi Arabia’s state-owned oil behemoth, Saudi Aramco, disclosed on Sunday a net profit of $121 billion for the fiscal year 2023, a decrease from its record-breaking performance in 2022 primarily due to lower global energy prices.
Despite this decline, Aramco’s earnings still marked its second-highest ever, a testament to the resilience of the company amid fluctuating market conditions exacerbated by ongoing production cuts within the OPEC+ alliance.
The company’s profitability figures are of significant interest, particularly as Saudi Arabia pursues ambitious development initiatives under the leadership of Crown Prince Mohammed bin Salman, aimed at diversifying the kingdom’s economy away from its heavy reliance on oil revenues.
Aramco’s profit in 2022 had reached an astounding $161 billion, making it likely the largest reported profit by any publicly traded company worldwide.
In its filing to the Tadawul stock market, Aramco attributed the decrease in profit to several factors, including lower crude oil prices, reduced sales volumes, and declining margins in its refining and chemicals segments.
Despite the lower profit figures, Aramco maintained a commitment to its shareholders by increasing dividends to over $31 billion in the fourth quarter, as indicated in its filings. The company scheduled a conference call for Monday to discuss its financial performance.
Aramco’s total revenue for the year amounted to $440 billion, a decrease from $535 billion in 2022, reflecting the broader challenges faced by the energy sector amidst economic headwinds.
Aramco CEO Amin Nasser highlighted the company’s resilience and adaptability in navigating the challenging operating environment, which contributed to robust cash flows and sustained profitability.
Despite orders from the Saudi government to maintain production levels at 12.8 million barrels of oil per day, Aramco remains a key player in global oil markets, collaborating with OPEC and non-OPEC allies to stabilize oil prices amid fluctuating demand.
Saudi Arabia’s strategic position within the OPEC cartel, coupled with its partnership with key oil-producing nations like Russia, underscores its influence in shaping global energy markets.
With a market value of $2 trillion, Aramco ranks as the world’s fourth most valuable firm, trailing behind tech giants such as Apple, Microsoft, and NVIDIA.
While Saudi Arabia seeks to leverage its oil wealth for ambitious projects like the futuristic city Neom, concerns persist among environmental activists regarding the environmental impact of fossil fuel consumption.
Recently, Crown Prince Mohammed bin Salman transferred an additional eight percent of Aramco shares to the kingdom’s sovereign wealth fund, worth over $160 billion, further consolidating the government’s control over the oil giant.
