Saudi Aramco quarterly profits collapse by 25% amid coronavirus crisis

Saudi Aramco – the world’s most profitable company in 2019 – has posted a 25% drop in Q1 profits following the outbreak of COVID-19 and the subsequent collapse in oil demand and prices.

Saudi Arabia’s state-owned oil giant made US$16.6 billion in the first three months of 2020, down heavily from the $22.2 billion made a year earlier as lockdowns slashed global oil demand by a third from pre-crisis levels.

Last month oil prices fell to 21-year lows before the world’s largest oil-producing countries, led by Saudi Arabia, struck a deal to limit global production by nearly 10 million barrels per day (bpd) from May to help ease the glut of crude in the global market.

Aramco’s CEO Amin Nasser said: “Looking ahead to the remainder of 2020, we expect the impact of the COVID-19 pandemic on global energy demand and oil prices to weigh on our earnings.

“Longer term we remain confident that demand for energy will rebound as global economies recover,” Nasser added.

Nonetheless, the company was instructed by the Saudi state on Monday to deepen its production cuts by a further 1 million bpd in June to help drive prices up from around $30 a barrel.

Low oil prices have wiped billions of dollars off Aramco’s market value just six months after its highly anticipated IPO on the Kingdom’s Tadawul exchange, which valued the company at $1.7 trillion. In March, the company said it would cut capital spending by $8 billion.