Saudi Aramco Q2 Net Income Dips 22% Amid Falling Oil Prices and Demand

Saudi Aramco’s adjusted net income for the second quarter of 2025 declined to 92.04 billion Saudi riyals ($24.5 billion), a sharp drop from the 425.71 billion riyals in revenue it reported during the same period last year, despite a slight increase in output [1]. The company attributed this decline to lower crude oil prices and weaker demand for refined products, which significantly constrained its earnings [1]. This marked the 10th consecutive quarter of earnings contraction, with net income falling 22 percent year-on-year to 85 billion riyals ($22.67 billion), primarily driven by persistently low crude prices [2]. Free cash flow also dropped by 20 percent to $15.2 billion in the second quarter, falling short of the $21.36 billion dividend paid to the Saudi government and increasing the need for borrowing [4].

Capital spending rose slightly from 45.5 billion riyals in the second quarter of 2024 to 46.2 billion riyals in the same period this year [1]. Aramco’s debt also increased, reaching $30.8 billion by the end of the quarter compared to $24.7 billion in the first quarter [4]. The firm has also adjusted its dividend policy, with performance-linked dividends cut significantly after distributing high profits from 2022, leading to a 2025 dividend reduction by about one-third compared to the previous year [4]. Despite the financial challenges, CEO Amin Nasser remains optimistic about the second half of 2025, projecting an increase in oil demand of over two million barrels per day [1].

Global oil prices continued to face downward pressure, with Brent crude futures at $68.75 per barrel and U.S. West Texas Intermediate at $66.28 as of Tuesday morning [1]. The decline was exacerbated by U.S. tariffs and geopolitical tensions, including U.S. President Donald Trump’s renewed threats against India over its purchases of Russian oil [1]. These factors have introduced volatility into the market and raised concerns about the future of global demand, particularly in China [4]. While Aramco is increasing production in line with OPEC+ agreements—aiming to pump nearly 10 million barrels per day by September [4]—analysts warn that a potential supply surplus could further depress prices and compound the company’s challenges.

The contrast between Aramco and its Western counterparts is stark. While Exxon Mobil Corp and Chevron Corp exceeded earnings expectations in the second quarter, Aramco’s results underscore the difficulties faced by the firm amid weak oil prices and a high cost of capital [4]. The broader energy sector is also under pressure, with lower oil prices squeezing margins across the board. Aramco’s financial performance highlights the delicate balance the company must maintain between fulfilling its fiscal commitments and maintaining its role as a key player in the global energy market [5].

Source:

[1] https://www.cnbc.com/2025/08/05/saudi-aramco-q2-earnings-2025.html

[2] https://uk.finance.yahoo.com/news/saudi-aramco-profit-drops-10th-072210416.html

[3] https://www.msn.com/en-us/money/markets/aramco-profit-dips-for-10th-straight-quarter/ar-AA1JVPZz?ocid=finance-verthp-feeds

[4] https://theedgemalaysia.com/node/765360

[5] https://www.reuters.com/business/energy/saudi-aramco-second-quarter-net-profit-drops-22-lower-revenues-2025-08-05/