Oil giant Saudi Arabian Oil Co (Saudi Aramco) yesterday reported first-quarter profit of US$31.88 billion, down nearly 20 percent from the same period last year, as energy prices have sunk over global recession concerns.
The firm blamed the drop — compared with US$39.47 billion in the same quarter last year — on lower crude oil prices.
Aramco made a US$30.73 billion profit in the fourth quarter of last year.
Photo: Reuters
“The results reflect Aramco’s continued high reliability, focus on cost and our ability to react to market conditions as we generate strong cash flows and further strengthen the balance sheet,” Aramco president and CEO Amin H. Nasser said in a statement.
Aramco said that it “believes it is well positioned to withstand fluctuating commodity prices through its low-cost upstream production.”
Benchmark Brent crude traded early on Tuesday at about US$76 a barrel, down from a high of US$125 in the past year.
While saying that Aramco was “working to further reduce the carbon footprint of our operations,” Nasser remained bullish on the world’s need for crude and natural gas.
“We are also moving forward with our capacity expansion, and our long-term outlook remains unchanged as we believe oil and gas will remain critical components of the global energy mix for the foreseeable future,” he added.
Those earnings came off the back of energy prices rising after Russia launched its war in Ukraine in February last year, with sanctions limiting the sale of Moscow’s oil and natural gas in Western markets.
However, oil prices have sunk in the past few weeks amid fears of a coming recession as central banks in the US and elsewhere raise interest rates to try to tame inflation. That is even after OPEC+ announced surprise production cuts last month totaling up to 1.15 million barrels.
Meanwhile, Aramco announced it would begin issuing performance-based dividends to stockholders, on top of the dividends it already offers.
Its base dividend in the fourth quarter of last year was US$19.5 billion, ranking it as the highest in the world for a publicly traded firm.
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