Today (May 7), Saudi Aramco, the state-owned oil giant of Saudi Arabia, reported a net profit of US$27.27 billion for the first quarter of 2024, marking a significant 14.5% decline compared to the same period last year. The decrease in profits is primarily attributed to the ongoing reduction in oil production by Saudi Arabia.
According to Saudi Aramco, the company’s net profit for Q1/24 stood at 102.27 billion riyals (US$27.27 billion), down from 119.54 billion riyals in Q1/23. This decline is primarily driven by a decrease in the volume of crude oil sales.
As the world’s largest crude oil exporter, Saudi Arabia currently produces approximately 9 million barrels of crude oil per day, which is significantly lower than its production potential of 12 million barrels per day.
Since October 2022, Saudi Arabia, along with the OPEC+ group led by Saudi Arabia and Russia, has implemented several production cuts to bolster crude oil prices. In April 2023, Saudi Arabia and several OPEC+ member countries agreed to voluntarily reduce crude oil production by more than 1 million barrels per day. Additionally, following the OPEC+ meeting in June 2023, Saudi Arabia announced another reduction in crude oil production by 1 million barrels per day.
These production cuts have led to a decrease in crude oil sales volume, ultimately impacting Saudi Aramco’s profitability in Q1/24.