This picture shows Aramco tower (C) at the King Abdullah Financial District (KAFD) in Riyadh on April 16, 2023. - Saudi Arabia has put a second four-percent chunk of shares of the Aramco energy giant, worth tens of billions of dollars, under the control of the country's sovereign wealth fund, state media said. FAYEZ NURELDINE/AFP via Getty Images
Oil giant, Saudi Aramco reported a net profit of $29.1 billion for the second quarter of 2024, a 3% decline compared to the same period last year. According to CNBC, the dip in profits came as the company faced lower crude production volumes, which have been a key factor in the recent financial performance.
As a result, net income for the first half of the financial year also saw a drop, falling from $62 billion last year to $56.3 billion this year.
Regardless, Aramco reported a solid financial performance, including a confirmed base dividend of $20.3 billion for the second quarter and an additional performance-based dividend of $10.8 billion expected in the third quarter. The company anticipates paying out a total of $124.2 billion in dividends this year.
The decline in production volumes is largely attributed to the ongoing production cuts agreed upon by OPEC+ members, including Saudi Arabia. In early June, VCPost learned that the alliance decided to extend these cuts into 2025 to support oil prices, following sluggish demand growth.
Despite these efforts, global oil prices have remained lower than many OPEC members need to balance their budgets. For instance, Saudi Arabia requires Brent crude to be at $96 per barrel, while recent prices have hovered in the mid-$70 range.
In a press call, Aramco CEO Amin Nasser shared his optimism about future oil demand, predicting it will reach 104.7 million barrels per day in 2024, up from 102 million barrels per day in 2023.
He suggested that the market might be overreacting to short-term news, such as the weaker-than-expected US job growth report for July.
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