Saudi Aramco's Q2 Profit Falls 3% Due to Low Oil Production

Saudi Arabia's state oil company, Aramco, has announced a net profit of $29.1 billion for the second quarter of 2024, reflecting a slight decrease of over 3% compared to the same period last year. The company's net income for the first half of the financial year stands at $56.3 billion, down from $62 billion in 2023. Despite the dip in profits, Aramco has reaffirmed its commitment to shareholder returns, maintaining a base dividend of $20.3 billion and declaring a performance-linked dividend of $10.8 billion for the upcoming third quarter. The decline in profits is attributed to ongoing production cuts, with Aramco reporting an output of 8.99 million barrels per day in the second quarter, as noted in a recent OPEC report. This reduction in production comes at a time when international benchmark Brent Crude prices have fallen from the mid-$80 range to the mid-$70 range, which is concerning for several OPEC member states that rely on higher prices to balance their budgets. In light of these challenges, Aramco's CEO expressed optimism regarding future oil demand, predicting an increase in the second half of 2024. The forecast anticipates global oil demand reaching 104.7 million barrels per day for the year, suggesting a potential recovery in the market. Following the earnings report, Aramco's stock saw a modest increase of 1.31% on the Tadawul, the Saudi stock exchange, indicating investor confidence despite the lower profit figures.