• Saudi Aramco reported a 4.6% decline in first-quarter profits due to lower sales and operating costs.
• Net profit for the quarter was 97.54 billion riyals (approximately $26 billion), outperforming analyst estimates.
• The company confirmed total dividends of $21.36 billion, significantly affected by reduced free cash flow.
• Global crude prices have been under pressure amid economic uncertainties and rising production levels.
• Saudi Arabia's ambitious Vision 2030 plan may be adversely affected by declining revenues from Aramco.

Saudi oil giant Aramco has announced a 4.6% decline in its net profits for the first quarter of 2025, attributing the drop to lower sales and increased operating costs, alongside a backdrop of economic uncertainty affecting the crude oil market. The company reported a net profit of 97.54 billion riyals (approximately $26.01 billion) for the three-month period, which, however, exceeded a median estimate from 16 analysts of $25.36 billion, suggesting some resilience amidst a challenging market environment, according to Reuters, India Times, The Jakarta Post, and South China Morning Post.

Aramco's revenue for the quarter was $108.1 billion, a slight increase from last year's $107.2 billion, adequate to support the company’s operations. This performance was bolstered by a confirmed dividend payout of $21.36 billion, of which $219 million was tied to performance-based incentives established following a remarkable financial year in 2022 caused by high oil prices linked to geopolitical tensions. However, the performance-linked payout dropped significantly by nearly 98%, as a direct reflection of dwindling free cash flow, which stood at $19.2 billion for the first quarter, a decrease of 15.8% compared to last year, according to Reuters, India Times, and South China Morning Post.

Chief Executive Amin Nasser highlighted that "global trade dynamics affected energy markets in the first quarter of 2025," pointing out that economic uncertainty had negatively impacted oil prices. The performance of Aramco parallels a concerning trend for the Saudi economy, which extensively relies on revenues from oil to fund initiatives under the Vision 2030 plan, aimed at diversifying the kingdom's economy away from hydrocarbon dependency. With oil prices fluctuating, Aramco's pivotal role in supporting the economy becomes increasingly significant, as the kingdom's budget for 2025 anticipates a deficit of 2.3% of GDP, according to Reuters, The Jakarta Post, India Times, and South China Morning Post.

The decline in oil prices has raised concerns regarding upcoming infrastructure and development projects, including the construction of facilities for the anticipated 2034 World Cup and the ambitious NEOM city project, which are critical to the kingdom's long-term economic vision. Analysts suggest that Saudi Arabia may need to utilize its reserves or incur new debt to sustain these projects amidst dwindling revenues from Aramco, once regarded as the financial backbone of the nation's economy. This scenario demands increased scrutiny of Aramco's strategic decisions as global oil markets remain tumultuous, according to South China Morning Post and India Times.