Aramco expects sharp drop in 2025 dividends as 2024 profit falls

Published March 4, 2025
The Saudi Aramco logo is pictured at an exhibition in Paris, France, February 1, 2024 —  Reuters File Photo
The Saudi Aramco logo is pictured at an exhibition in Paris, France, February 1, 2024 — Reuters File Photo

Saudi oil giant Aramco said on Tuesday that it expects to declare total dividends of $85.4 billion in 2025, a near 30 per cent drop from payouts in 2024 as it faced lower sales and higher costs.

Aramco paid about $124.25bn in dividends in 2024 and had $97.78bn in payouts in 2023.

Aramco is the chief source of revenue for Crown Prince Mohammed bin Salman’s Vision 2030 reform agenda, which aims to remodel the Gulf kingdom’s crude-reliant economy.

Soaring energy prices following Russia’s invasion of Ukraine allowed Aramco to post record profits in 2022, before they dipped by 25pc in 2023.

In an attempt to prop up prices, Aramco slashed production by 500,000 barrels per day in April 2023 as part of a joint move with the Opec+ oil producers’ alliance.

Aramco followed up with a further cut of one million bpd in June 2023, agreeing last December with other Opec+ countries to extend the supply cut until March.

Aramco’s dividends for 2024 included about $43.1bn in performance-linked dividends, a mechanism introduced in 2023 on top of base dividends that are paid regardless of results.

The company declared $200m in performance-linked dividends to be paid in the first quarter of 2025, a steep decline from the nearly $10.8bn declared for each quarter of 2024.

Aramco reported a net profit of $106.2bn in 2024, down from $121.3bn in 2023.

“The decrease was primarily driven by lower revenue and other income related to sales, higher operating costs, as well as lower finance and other income. This was partially offset by lower income taxes and zakat,” Aramco said in a stock exchange filing. ($1 = 3.7503 riyals)

‘Not necessarily rolling in petrodollars’

Aramco is not the only energy major with lower profits. Britain’s Shell saw a 17pc drop last year and France’s TotalEnergies posted a 26pc decline.

A global surplus, spare production capacity and uncertain demand, coupled with unpredictable policy signals from US President Donald Trump are all weighing on prices, analysts said.

“Prices have remained lower than what Gulf governments like Saudi Arabia would like to see,” said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute and an adjunct assistant professor at Georgetown University.

“Energy market fundamentals are still manageable, but the Saudis aren’t necessarily rolling in more petrodollars than they know what to do with.”

Saudi Arabia, eyeing a post-oil future, is in the midst of a lavish spending plan aimed at attracting tourists and investment to the Middle East’s biggest economy.

Chief among a welter of flashy projects are Neom, a $500bn futuristic new city in the desert, the 2034 football World Cup and a major new airport for Riyadh.

Amena Bakr, head of Middle East Insights at trade intelligence company Kpler, said although market sentiment was holding back prices, Saudi could adjust its spending as it needs to.

“Overall the Opec+ policy has managed to tighten markets in terms of fundamentals, but what’s weighing on prices is negative market sentiment,” she told AFP.

“Saudi Arabia is known to adjust its budget depending on market conditions, and the kingdom does not target a certain oil price… projects and plans can be adjusted along the way.”

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