With a net income of $31.9 billion, is Saudi Aramco Profitable?
Saudi Aramco, primarily owned by the Saudi Arabian government, announced a 19% drop in quarterly profits compared to 2022. Saudi Aramco recorded a profit of $31.9 billion in the first quarter of 2023, compared with $39.5 billion for the same period last year.
Other oil majors have recorded record profits for the first quarter, including BP, which made a profit of $8.2bn. Shell also recorded record profits of almost $9.7bn for the same period, and Equinor posted $12bn in first-quarter profits.
But with oil prices still relatively robust, Saudi Aramco, the world’s biggest oil company, still remains highly profitable. Its earnings rival the combined quarterly profits of Exxon Mobil, Chevron, Shell, and BP. This is largely due to its ability to produce massive amounts of petroleum from vast fields in Saudi Arabia at a relatively low cost.
According to Aramco’s President & CEO Amin H. Nasser, the results “Reinforce [the company’s] commitment to maximizing long-term shareholder value.” Nasser added: “We are also announcing our intention to introduce a mechanism for performance-linked dividends in addition to the base dividend the company currently distributes.”
On a call with financial analysts, Amin Nasser said that demand for oil seemed likely to remain healthy this year as the economies of China and India, two major importers, grow strongly. He attributed the recent drop in oil prices to concerns that economic growth would be sapped by central banks raising interest rates and by the regional banking crisis in the United States. “In our view, the markets overreacted,” he said.
Amin H. Nasser was recently ranked No. 6 in a list of the world’s best CEOs for 2023; meanwhile, Saudi Aramco ranked No. 5 in the CEOWORLD magazine’s ranking of the most influential companies in the world.
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