DUBAI, United Arab Emirates — The state-controlled oil enterprise of Saudi Arabia, Aramco, announced a profit of $106.25 billion for 2024, marking a 12% decrease compared to the previous year as the drop in energy prices impacts the kingdom’s expansive development projects.
Saudi Arabia’s Crown Prince Mohammed bin Salman is already engaged in constructing a futuristic linear city called NEOM in the desert lands along the Red Sea, part of a $500 billion initiative. The kingdom also plans significant investments in infrastructure, including stadiums, to prepare for hosting the 2034 FIFA World Cup.
Additionally, the Crown Prince has pledged potentially $600 billion in U.S. investments, initially proposed to entice President Donald Trump during his first foreign visit as the president to the kingdom. Saudi Arabia might also serve as a potential meeting spot between Trump and Russian President Vladimir Putin amidst the ongoing conflict in Ukraine.
With the Organization of the Petroleum Exporting Countries plus (OPEC+) contemplating heightened production, Saudi Arabia foresees the necessity to acquire additional debt to support the Crown Prince’s extensive visions.
Aramco has faced reduced earnings due to falling oil prices. According to the Riyadh Tadawul stock exchange, Aramco, officially known as the Saudi Arabian Oil Co., recorded revenues of $436 billion in 2024, slightly less than the $440.88 billion in 2023. Aramco’s profits were noted at $121 billion in 2023, a decrease from its previous record due to declining energy prices.
“The decrease was primarily driven by lower revenue and other income related to sales, higher operating costs, as well as lower finance and other income,” as detailed in Aramco’s recent filing.
Presently, Aramco shares are trading around $7.33 each, down from their last year’s peak of $8.71, following the downward trend of oil prices. The benchmark Brent crude value has also decreased by 10% this year, standing at $73 per barrel.
With a market valuation of $1.74 trillion, Aramco ranks as the sixth-most valuable global company, following tech giants like Apple, Microsoft, NVIDIA, Amazon, and Alphabet, the parent company of Google.
Aramco disclosed plans to distribute $21.36 billion in dividends for the fourth quarter, including a relatively small performance dividend of $220 million. Overall dividend payouts are expected to amount to $85.4 billion for the year, which signals a diminishing cash flow available to the Saudi monarchy.
“Our strong net income and increased base dividend illustrate Aramco’s exceptional resilience,” stated Amin H. Nasser, CEO and President of Aramco, in a press release.
On the geopolitical front, Aramco’s reports coincide with OPEC+ deciding on an online forum to boost oil production starting in April, marking the first production increase since 2022, likely putting additional pressure on oil prices. This announcement follows previous critiques by Trump towards the cartel.
Thanks to its extensive oil reserves, predominantly located near the surface in its desert regions, Saudi Arabia remains one of the most cost-effective countries to produce crude. The Institute of International Finance estimates that each $10 per barrel increase in oil price could generate an additional $40 billion in annual revenue for the kingdom.
While the Saudi government holds the majority of Aramco’s shares, a small portion of the company was publicized in late 2019, and further public listings are being considered.
