Saudi Aramco profits plunge 39% amid oil price tussle

Saudi Arabia's premier oil company, Aramco, has recorded a dramatic 39per cent drop in profits for the second quarter, ending on June 30.

In its recent report, Aramco revealed a net profit of $30.07 billion in the second quarter, marking a sharp drop of about 39per cent compared to the profit of $48.4 billion in the second quarter of 2022.

The decline has been attributed to lower crude oil prices and weakening margins in the refining and chemicals sectors. Aramco's plummeting profits align with broader industry trends, reflecting the ongoing turbulence in the oil sector.

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Amin H. Nasser, President & CEO of Aramco, highlighted during an earnings call, "Despite prevailing global market volatility and economic uncertainties, the events of the first half of this year reaffirm our belief in the crucial need for continued investment in our industry. This investment is vital not only to ensure stable market supplies but also to facilitate a seamless transition towards cleaner energy."

This downward trend resonates across the financial performance of other energy giants like BP, ExxonMobil, Shell, and TotalEnergies, all grappling with diminished earnings due to the weight of weakened oil prices.

However, a survey sponsored by Aramco revealed that the second-quarter profit slightly exceeded expert predictions. A report submitted to the Saudi stock exchange, Tadawul, attributed the significant profit decline to the combination of reduced crude oil prices and weakening margins in the refining and chemicals sectors.

Meanwhile, Aramco has announced a second-quarter dividend of $18.8 billion, scheduled to be disbursed in the third quarter of 2022. Additionally, in alignment with the company's 2021 Annual Report, Aramco distributed bonus shares to shareholders in Q2 2022 at a rate of one share for every ten shares owned.

Further enhancing its financial approach, Aramco is poised to initiate performance-linked dividends, with a projected payout of $9.87 billion anticipated for the third quarter. This will be based on thefull-year 2022 and first-half 2023 performance results.

The oil giant hasalso been taking steps to accelerate the development of lower-carbon solutions in the energy industry. On June 27, Aramco inaugurated the Aramco Research Center at the King Abdullah University of Science and Technology, which uses artificial intelligence and machine learning to develop innovative ways to enable a Circular Carbon Economy.

"But while there is a very real and present need to safeguard the security of energy supplies, climate goals remain critical, which is why Aramco is working to increase production from multiple energy sources, including oil and gas, renewables, and blue hydrogen," said CEO Nasser.

(With inputs from agencies)

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