Business & Finance
CEO of Saudi Aramco cites Red Sea as contributing factor to 24.7% decrease in profits for 2023
Saudi Aramco, the world’s largest oil company, reported a significant 24.7 percent drop in profits for 2023 compared to the previous year. The decline in profits was attributed to lower oil prices and production cuts, impacting the company’s financial performance.
According to Saudi Aramco CEO, Amin H. Nasser, the decline in profits can be attributed to various factors, including the impact of lower crude oil prices, lower volumes sold, and weakening refining and chemicals margins. The company reported a net income of 454.7 billion Saudi riyals ($121.25 billion) in 2023, compared to 604.01 billion Saudi riyals ($161.07 billion) in 2022.
The drop in profits comes after a record year in 2022, driven by high oil prices resulting from Russia’s invasion of Ukraine. Despite the challenges in 2023, Aramco achieved its second-highest net income and increased dividends by 30% year-on-year.
Looking ahead, analysts predict oil prices to rise to around $88 per barrel in 2024, with the potential to reach $90 per barrel by the end of the year. Saudi Arabia, as the world’s biggest crude oil exporter, needs oil to be priced at around $80 per barrel to balance its budget, considering production cuts and increased spending.
Under Crown Prince Mohammed bin Salman’s leadership, Saudi Arabia continues to diversify its economy, investing in ambitious projects like NEOM. Saudi Aramco remains a crucial source of revenue for the kingdom’s economic reform program, Vision 2030, which aims to reduce dependence on oil revenues. Recently, the kingdom transferred an additional eight percent Aramco stake to entities owned by the Public Investment Fund, further aligning with its strategic economic objectives.
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