Saudi Aramco net profit plunges by 44% in 2020

Saudi Aramco has reported a 44.4% drop in net profit for the 2020 financial year, as the COVID-19 pandemic took a chunk out of global fuel demand and prices fell accordingly.

The state-run Saudi Arabian oil giant made US$49 billion in net income last year – down from $88.2 billion in 2019 – with CEO Amin Nasser describing 2020 as ‘one of the most challenging years in recent history’.

However, the company played its ‘strong financial resilience’ in comparison to some of its loss-making international peers in the oil and gas space. Aramco also confirmed its shareholders would receive dividends totalling $75 billion, despite the challenging conditions.

Since the start of 2021, the oil price has recovered to pre-pandemic levels, with Brent crude rising to $67 per barrel at the start of the month after OPEC+ agreed to maintain current production cuts into April.

“We are pleased that there are signs of a recovery,” Nasser told reporters in an earnings call. “China is also very close to pre-pandemic levels. So in Asia, East Asia in particular, there is strong pick-up in demand.”

Nasser acknowledged that demand in Europe and the US will improve with the deepening of COVID-19 vaccinations programmes throughout the rest of the year. Global oil demand is expected to reach 99 million barrels per day by the end of this year, he added.

@RGNonline