Despite Energy Price Dip, Aramco Still Posts Strong Profits in 2023

Saudi Arabia’s oil giant, Aramco, announced on Sunday a substantial profit of $121 billion for the previous year, though it marked a decrease from its 2022 record due to the prevailing lower energy prices.

Despite the decline, this still represents Aramco’s second-highest profit ever, a testament to the resilience of the company amid ongoing efforts by members of the OPEC+ alliance to restrict production and bolster global energy prices. However, the downturn in profits poses challenges for the kingdom as it pursues an ambitious development agenda spearheaded by its assertive crown prince aimed at diversifying its revenue sources away from oil.

In 2022, Aramco had reported a staggering profit of $161 billion, likely the largest ever recorded by a publicly traded company.

“The decrease mainly reflects the impact of lower crude oil prices and lower volumes sold, and weakening refining and chemicals margins,” stated the company in its filing to the Tadawul stock market.

Despite the dip in profits, Aramco increased dividends for its shareholders to over $31 billion in the fourth quarter, as per the filings.

Aramco had scheduled a conference call for Monday to delve into the details of its financial performance.

Last year, Aramco recorded an overall revenue of $440 billion, a decline from the $535 billion reported in 2022.

“Our resilience and agility contributed to healthy cash flows and high levels of profitability, despite a backdrop of economic headwinds,” commented Aramco CEO Amin H. Nasser in a statement.

Formally known as the Saudi Arabian Oil Co., Aramco maintained its output at 12.8 million barrels of oil per day, following directives from the Saudi government despite earlier plans for production increases.

With a market value of $2 trillion, Aramco holds the distinction of being the world’s fourth most valuable firm, trailing behind Apple, Microsoft, and NVIDIA, respectively. Aramco’s stock experienced a slight uptick on the Tadawul, trading at $8.64 a share on Sunday.