Aramco cuts dividend as Saudi budget pressures mount
Revenue from Aramco has long enabled the kingdom to contain its fiscal deficits, but cuts in production over the past two years have crimped oil sales
Aramco's Mazan oil and gas platform (Getty Images).
Aramco, the world’s largest oil company, is slashing dividend payouts in the face of Saudi Arabia’s growing budget troubles.
The company, which is majority-owned by the Saudi government, said it expects to declare total dividends of $85.4 billion this year, a nearly 30% drop from the $124 billion distributed to shareholders in 2024.
Revenue from Aramco has long enabled the kingdom to contain its fiscal deficits but cuts in production over the past two years have crimped the company’s oil sales.
Aramco said its net profit fell over 12% to $106.2 billion in 2024, blaming a decline in revenue and higher operating costs.
The company’s action will most likely also affect debt issuances by Saudi Arabia, whose nearly $15 billion in bond sales this year make it the biggest borrower in emerging markets, the news agency said.
Crude sales and Aramco’s large annual payouts are central to funding Crown Prince Mohammed bin Salman’s Vision 2030 economic overhaul plan. The level of the dividend’s distribution, however, has grown beyond the company’s earnings and dried up the $27 billion in net cash it had just over a year ago.
Aramco’s profit has declined year-on-year for seven consecutive quarters, and analysts are forecasting another drop in the fourth quarter. The company’s shares have declined 3% this year.