The world’s largest oil exporter, Saudi Aramco (Tadawul: 2222), reported a 22% year-on-year drop in second-quarter net income to $24.5 billion, marking its 10th consecutive quarterly decline as lower oil and product prices continued to weigh on earnings.
Despite the profit dip, the company’s shares have remained relatively stable, trading at SAR 23.83, reflecting a 0.33% decline, as the market has already priced in the headwinds facing the energy giant. The shares are roughly 12% below their secondary offering price in 2024.
The oil giant attributed the drop to “lower crude oil prices and lower refined and chemical products prices.” However, it added that these were partially offset by higher volumes sold of refined and chemical products compared to the previous quarter.
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Free cash flow fell to $15.2 billion in the quarter, while the company’s gearing ratio rose to 6.5% from 5.3% in March. Nonetheless, Aramco declared a $21.3 billion dividend for the quarter, including a $0.2 billion performance-linked payment.
President and CEO Amin H. Nasser said the company maintained “robust profitability” and reaffirmed confidence in long-term hydrocarbon demand. “We anticipate oil demand in the second half of 2025 to be more than two million barrels per day higher than the first half,” he said.
The earnings decline adds pressure on Saudi Arabia’s broader economy as it pursues Crown Prince Mohammed bin Salman’s Vision 2030 diversification plans.
Oil revenues still fund a significant share of the kingdom’s budget, which is expected to post a widening deficit this year.
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