Company announced Aramco Saudi Arabia today reported a 23% decline in net profits for the third quarter, slightly exceeding analysts’ estimates, due to the decline in crude oil prices and the quantities sold.
Net profit fell to $32.6 billion in the quarter ended September 30 from $42.4 billion a year earlier.
The oil company was registered Saudi Arabia The giant in the aforementioned period had revenues of $113.09 billion, compared to $144.99 billion in the same period last year.
Aramco’s profits benefited from higher crude oil prices compared to the previous quarter, but prices are well below their record levels a year ago.
Saudi Arabia, the largest member of the Organization of the Petroleum Exporting Countries, said:OPEC), it will continue to voluntarily reduce its production by one million barrels per day until the end of the year and that it will review the decision again next month.
The Kingdom may have to extend the reduction into next year amid signs of weakness in the actual oil market. Demand for fuels such as diesel is declining in Europe, a sign of weak economic growth.
The OPEC+ bloc (which includes OPEC members and non-OPEC producers, including Russia) is scheduled to meet later this month to review their supply policy.
Aramco partially offset the decline in upstream profits with improved refining margins in the third quarter, which pushed the unit to a profit of $5.3 billion from a loss in the same quarter last year.
Average oil prices
Jadwa Investment Company, based in Riyadh, said in a report issued in late October that prices this year are estimated at about $85 per barrel.
Analysts say that the Kingdom needs to price oil at about $80 per barrel to balance its budget, although this may not happen due to reduced production and increased spending.
Saudi Arabia’s production declined after Riyadh announced in April a reduction of 500,000 barrels per day as part of a joint move with other oil powers to reduce supplies by more than one million barrels per day in an attempt to support prices.
Last June, the Kingdom announced another voluntary reduction of one million barrels per day, which took effect last July, and recently confirmed that this reduction will continue until December.
The Kingdom’s daily production of crude oil currently stands at 9 million barrels, which is less than its maximum capacity of 12 million barrels per day.
Last week, the Saudi General Authority for Statistics announced a decline in gross domestic product by 4.5% in the third quarter of this year compared to last year, with oil activities declining by 17.3% and non-oil activities growing by 3.6%.