Saudi Aramco's profits plummet by 22% due to reduced prices
According to a statement made by Aramco's president and CEO, Amin H. Nasser, the world's biggest oil exporter has seen profits decline for 10 straight quarters since late 2022. Despite strong market fundamentals, the decline is primarily due to a combination of factors, including increased global oil supply competition, downward pressure on crude prices, and possibly higher operational or capital costs that have not been fully offset by market conditions.
Although global oil demand and fundamental factors remain strong, the oil market context as of mid-2025 shows significant nuances. U.S. crude oil production has reached record highs in May 2025, increasing supply in the global market and exerting downward pressure on prices despite strong demand. Crude oil prices remain relatively low compared to previous years, with Brent crude trading around $64.38 per barrel in early August 2025, one of the lowest levels seen in four years, influenced by trade tariffs and market uncertainties.
While Aramco is reducing its carbon intensity and aiming for sustainability goals, these transitional costs to cleaner operations could also be a factor impacting profitability short-term, though specific data on this impact is not detailed in the available sources.
The combination of these factors—higher global supply (notably from the U.S.), somewhat depressed oil prices, and possible operational cost challenges—can explain why Aramco’s profits might decline consecutively even when demand and market fundamentals appear strong.
It's worth noting that Aramco produces not only crude oil but also refined and chemical products. The company is a significant driver of the Saudi economy and a Gulf oil major. Despite tensions in the Middle East, including the short-lived Israel-Iran war in June, oil prices have remained low, currently around $70 a barrel. As of Tuesday, Aramco was trading at 23.91 riyals.
However, since a high point in 2022, Aramco has lost more than $800 billion in market value. Nasser, however, remains optimistic, stating that market fundamentals remain strong and anticipates oil demand in the second half of 2025 to be more than two million barrels per day higher than the first half.
The information in this article is sourced from AFP.
- Russia, with its vast energy resources, could potentially benefit from the current low oil prices, as it increases its exports to compensate for reduced revenues in other industries like finance, where sanctions have impacted investments.
- Although the Ukraine-Russia gas disputes have been resolved temporarily, their ongoing tensions could create uncertainties in energy markets, affecting global energy supply and prices.
- Israel, seeking to diversify its energy sources and decrease its dependence on imports, has been investing significantly in renewable energy industries, such as solar and wind power, given the country's climate and geographical advantages for solar energy production.
