Saudi Aramco Profit Falls on Oil-Price Weakness -- 2nd Update

By Christian Moess Laursen

Saudi Arabia's national oil company Aramco said its third-quarter profit fell on lower oil prices and refining margins, and that it plans to pay $31.05 billion in dividends.

Saudi Arabian Oil Co., known as Aramco, said on Tuesday that it booked a quarterly net profit of $27.56 billion, down from the $32.58 billion it reported for the same period last year.

Analysts expected $26.89 billion, according to a consensus averaged by Visible Alpha.

Lower crude oil prices and weakening refining margins dragged the results, the company said.

Aramco's profit fall follows a trend seen across the world's largest hydrocarbon producers, with companies on both sides of the Atlantic suffering from low oil prices and weaker refining margins in the third quarter.

Oversupply and a worsened outlook for global demand dragged Brent crude-oil prices--the international oil benchmark--to a three-year low in September. The weak oil price has prompted a cautious approach by the Organization of the Petroleum Exporting Countries and its allies.

Over the weekend, a group of eight OPEC+ members led by Saudi Arabia and Russia opted to extend voluntary production cuts until the end of December. They originally planned to start returning 2.2 million barrels a day of sidelined supply to the market in October.

Saudi Arabia's oil minister had warned prices could fall as low as $50 a barrel if OPEC chose to bring back the curbed supply, The Wall Street Journal reported last month.

Both OPEC and the International Energy Agency trimmed their global demand forecasts for a third consecutive time last month, citing slower demand in top crude importer China.

Aramco said the average price it received for its crude-oil products in the quarter fell to $79.3 a barrel from $89.3 a barrel last year.

Meanwhile, global refining margins have sharply fallen due to weaker demand and new refineries coming online.

Aramco, one of the most valuable companies globally by market capitalization, declared a base dividend of $20.28 billion and a performance-linked dividend of $10.77 billion to be paid in the fourth quarter. It declared a base dividend of $19.5 billion and a performance dividend of $9.9 billion in the third quarter of 2023.

It kept its full-year guidance of $124.2 billion in dividends.

Write to Christian Moess Laursen at christian.moess@wsj.com

(END) Dow Jones Newswires

November 05, 2024 01:22 ET (06:22 GMT)

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