Saudi Aramco's Profit Drops 12% Amid Lower Energy Prices

Saudi Aramco, the world's most profitable company, reported a $106.25 billion profit in 2024, a 12% decrease from the previous year, as lower energy prices impacted its earnings. The state-owned oil giant, formally known as the Saudi Arabian Oil Co., saw its revenues decline to $436 billion in 2024, compared to $495 billion in 2023.



The decrease in profits can be attributed to the global energy market's volatility and the subsequent drop in oil prices. Benchmark Brent crude fell by 10% in 2024, reaching $73 per barrel, which negatively affected Aramco's revenue. The company's stock price also reflected the market's sentiment, trading around $7.33 a share in 2024, down from a high of $8.71 over the last year.

To mitigate the impact of lower energy prices, Aramco has implemented several strategies to maintain its profitability and ensure long-term growth. The company has maintained its base dividend and performance-linked dividend, sharing the upside with shareholders. In 2024, Aramco expects to declare industry-leading total dividends of $124.2 billion.

Additionally, Aramco has invested in new energy projects, such as the expansion of the Jafurah gas field and the third phase of its main gas network upgrade, totaling over $25 billion. The company has also made its initial venture into the global liquefied natural gas (LNG) market by acquiring a minority share in MidOcean Energy and negotiating stakes in LNG projects in the US.

Moreover, Aramco has committed to reducing its operational emissions to net zero by 2050 and has established a sustainability-focused venture capital fund to drive lower-emission energy solutions. These investments are expected to generate long-term returns by reducing Aramco's carbon footprint, enhancing its reputation, and opening new revenue streams in the low-carbon energy sector.



In conclusion, Saudi Aramco's profit decline in 2024 reflects the global energy market's volatility and lower energy prices. Despite the challenges, Aramco has implemented strategic measures to maintain its profitability and ensure long-term growth, including dividend payments, investments in new energy projects, and a commitment to sustainability. As the world's most profitable company, Aramco remains well-positioned to navigate the evolving energy landscape and capitalize on new opportunities.