Saudi Aramco’s 2023 Profit Decline

Saudi Aramco Revenue Increases but Profit Slashed

Saudi Aramco announced a 24.7 percent decrease in profits for 2023 compared to the previous year, citing lower oil prices and production cuts as contributing factors.

Net income dropped to $121.25 billion from $161.07 billion in 2022. This decline was primarily attributed to the impact of reduced crude oil prices, lower sales volumes, and weaker refining and chemicals margins.

Saudi Aramco…

The surge in oil prices following Russia’s invasion of Ukraine in February 2022, which peaked at over $130 per barrel that year, propelled Aramco to report record profits in 2022, marking Saudi Arabia’s first annual budget surplus in nearly ten years.

However, the subsequent drop in prices to around $85 per barrel in 2023 resulted in significant profit declines throughout the year for Aramco.

Despite these challenges, Aramco’s CEO Amin H. Nasser expressed satisfaction with achieving the second-highest net income in the company’s history in 2023, attributing it to their resilience and agility in navigating economic headwinds.

Looking ahead, analysts predict oil prices to increase to approximately $88 per barrel in 2024, partially influenced by global uncertainties such as the Israel-Hamas conflict.

Maintaining a balanced budget remains crucial for Saudi Arabia, requiring oil to be priced around $80 per barrel, though this could be impacted by production cuts and increased spending. As such, Saudi Aramco continues to adapt its strategies to ensure profitability amidst evolving market conditions.

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