- Aramco reported a 4.6% decline in Q1 2025 net profit, totalling SAR 97.54 billion ($26.01 billion), due to lower sales revenues and rising operational costs.
- CEO Amin H. Nasser linked the profit drop to global trade dynamics and economic uncertainty, which pressured oil prices.
- The decline highlights challenges for Saudi Arabia’s Vision 2030, as the Kingdom seeks to diversify its economy amid falling oil prices.
Saudi Arabian Oil Company (Aramco) reported a 4.6% decline in net profit for the first quarter of 2025. The company earned SAR 97.54 billion ($26.01 billion), down from SAR 102.27 billion ($27.27 billion) in the same period last year. The drop in profit stemmed from lower sales revenues and higher operational expenses.
Aramco’s statement, published by the Saudi stock exchange and Agence France-Presse, attributed the decrease to “lower revenues and other sales-related income.” Additionally, higher operating costs contributed to the downturn. Despite the decline, Aramco remains a crucial financial pillar of Saudi Arabia’s economy, with the state owning 81.5% of the company.
Amin H. Nasser, Aramco’s President and CEO, linked the decline to global trade dynamics and economic uncertainty. He said oil prices came under pressure due to concerns over US trade policies and their potential impact on global demand. Nasser explained that these factors created significant volatility in energy markets during the first quarter of 2025.
Aramco’s financial performance is critical as Saudi Arabia continues its ambitious Vision 2030 strategy. The initiative, led by Crown Prince Mohammed bin Salman, aims to diversify the Kingdom’s economy beyond oil. Key projects under Vision 2030 include the $500 billion NEOM megacity, a bid to host the 2034 World Cup, and the construction of a new international airport in Riyadh.
The company’s recent results contrast with its performance in 2022, when it posted record profits following a spike in oil prices due to Russia’s invasion of Ukraine. This surge in oil prices allowed Saudi Arabia to achieve a budget surplus for the first time in nearly a decade. However, since 2023, falling oil prices have reversed this trend.
In September 2024, Saudi Arabia’s Ministry of Finance projected a 2.3% budget deficit for 2025, which is expected to persist until 2027. This projected shortfall adds to the challenges posed by the decline in Aramco’s revenues. The Saudi government depends heavily on oil revenues to fund its development goals, and the reduced income from Aramco creates additional pressure on the national budget.
Aramco’s performance also highlights the ongoing volatility in global oil markets. While the company remains a dominant player in the energy sector, it cannot escape the broader economic trends affecting oil prices worldwide. Nasser emphasised the importance of Aramco’s long-term strategy in navigating these challenges. “The impact of global economic volatility on our results underscores the need for a sustainable approach,” he said.
Despite the dip in profit, Aramco continues to be a cornerstone of Saudi Arabia’s economic foundation. Its performance remains a key indicator of the Kingdom’s broader financial health. As the company adapts to the changing landscape of global energy markets, its role in the Vision 2030 initiative and its ability to adjust to shifting conditions will be crucial for Saudi Arabia’s future development.
The decline in profits highlights the challenges Saudi Arabia faces as it works to diversify its economy. While oil continues to provide vital revenue, the Kingdom increasingly focuses on non-oil sectors to secure long-term growth. Aramco’s performance will play a central role in this transition.