Saudi Aramco announced making a net profit of $31.9 billion in the first quarter of 2023, representing a 19.25 per cent decline year-over-year. A drop in crude prices was blamed for its declining fortune. Also, considering that its Q1 2022 net profit benefited from the Russia invasion, it makes sense that the numbers drop as the effect of the conflict is dissipating.
The company remains the largest oil company in the world and its profit is nearly three quarters of the $40.5 billion that the five other major oil companies — BP, SHell, ExxonMobil, Chevron, and TotalEnergies –made in the same period.
Amin H. Nasser, CEO and president of the company, said that the results showed its ability to react to market conditions and its continued high reliability. He said that it is continue on its capacity expansion trajectory.
Saudi Arabia owns the company, at least 90 per cent of it, and relies on its earnings. So, its performance typically reflect on the country’s economic state and plans.
In mid-April, the country’s leadership transferred four per cent of Saudi Aramco’s shares to Sanabil Investments; a company under its Public Investment Fund (PIF). It had transferred similar chunk of shares to the PIF in 2022 as well.
Last year December, the country’s finance minister said that the national budget for 2023 will have a surplus of $4 billion and its GDP will grow by 3.1 per cent. However, after Aramco’s Q1 2023 performance, the minister announced a budget deficit of $773 million for the quarter. Although, the country does not see this as a concern, as it stated to the Saudi Press Agency.
At the start of the second quarter of this year, the oil producer announced output cut of about one million barrels per day. Experts believe that the production cuts could boost oil prices later in 2023 if economic trends act accoringly.
For 2022, the company, which is officially now called Saudi Arabian Oil, made a record profit of $161.1 billion. Its 2022 numbers are not living up to expectation.
