In 2024, Aramco reported a profit of $106.25 billion, down 12% from 2023 due to falling energy prices. Revenues were $436 billion, impacting Saudi development projects. OPEC+’s decision to increase oil production may pressure prices further, prompting the kingdom to consider new debt for extensive infrastructure investments.
In 2024, Saudi Arabia’s national oil company, Aramco, reported substantial profits of $106.25 billion, reflecting a decline of 12% from the previous year. This decrease is attributed to dwindling energy prices, which have impacted Saudi Arabia’s expansive development plans. The country’s future investments, including a significant $500 billion endeavor known as NEOM, necessitate considerable financial resources and infrastructure enhancements, especially with the upcoming 2034 FIFA World Cup.
Crown Prince Mohammed bin Salman has been spearheading ambitious projects such as constructing new stadiums and vast infrastructure. To fulfill these requirements, the kingdom may need to incur new debt as OPEC+ aims to increase oil production, which could further depress oil prices. Aramco’s revenues for the year were recorded at $436 billion, slightly down from $440.88 billion in 2023, reflecting the ongoing challenges within the energy sector.
The reduction in Aramco’s annual profit, which was previously $121 billion in 2023, is primarily due to lower sales revenue, increased operational costs, and lower financial gains. Aramco’s stock has seen a decline, trading around $7.33 per share, down from a yearly high of $8.71. The current Brent crude oil prices are at $73, marking a 10% decline for the year, which also contributes to the company’s decreased profitability.
Despite these challenges, Aramco remains a vital player in the global economy, boasting a market value of approximately $1.74 trillion, positioning it as the sixth-most valuable company worldwide. The company intends to distribute dividends totaling $21.36 billion for the fourth quarter and projects an annual payout of $85.4 billion for the year. Aramco’s CEO, Amin H. Nasser, underscored the company’s resilience amid fluctuating net income and the operations involved in maintaining its dividends.
Recently, discussions within OPEC+ resulted in a resolution to increase oil production starting April, the first such adjustment since 2022. This decision is likely to exert additional pressure on oil prices, amidst criticisms of the cartel’s pricing strategies. Notably, Saudi Arabia’s oil production remains economically favorable due to its vast, easily accessible crude reserves, reinforcing the kingdom’s critical position in the global oil market.
Aramco’s reported profit of $106.25 billion in 2024 indicates a significant challenge amid lower energy prices, necessitating strategic decisions on infrastructure development and potential debt acquisition. The planned increase in oil production by OPEC+ may further influence market dynamics, requiring careful financial management to sustain the kingdom’s ambitious projects, including preparations for major global events, such as the FIFA World Cup.
Original Source: apnews.com
