Oil giant Saudi Aramco has reported a first-quarter profit of 31.88 billion US dollars (£25.2 billion), down from 39.47 billion dollars (£31.2 billion) the same quarter last year.
The business, formally known as the Saudi Arabian Oil Co, blamed the fall on lower global oil prices. Aramco made a 30.73 billion dollar (£24.3 billion) profit in the fourth quarter of last year.
Aramco president and chief executive Amin H Nasser said in a statement: “The results reflect Aramco’s continued high reliability, focus on cost and our ability to react to market conditions as we generate strong cash flows and further strengthen the balance sheet.”
Aramco said separately that it “believes it is well positioned to withstand fluctuating commodity prices through its low-cost upstream production”.
Saudi Arabia’s vast oil resources, located close to the surface of its desert expanse, make it one of the world’s least expensive places to produce crude. For every 10 dollar rise in the price of a barrel of oil, Saudi Arabia stands to make an additional 40 billion dollars (£31.7 billion) a year, according to the Institute of International Finance.
In March, Aramco announced earnings of 161 billion dollars (£127.4 billion) last year, claiming the highest-ever recorded annual profit by a publicly listed company and drawing immediate criticism from activists amid concerns about climate change.
While saying Aramco is “working to further reduce the carbon footprint of our operations”, Mr Nasser remained bullish on the world’s need for crude and natural gas.
“We are also moving forward with our capacity expansion, and our long-term outlook remains unchanged as we believe oil and gas will remain critical components of the global energy mix for the foreseeable future,” he added.
Those earnings came off the back of energy prices rising after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Moscow’s oil and natural gas in Western markets.
However, oil prices have sunk in recent weeks amid fears of a coming recession as central banks in the US and elsewhere raise interest rates to try to tame inflation.
Benchmark Brent crude was trading at around 76 dollars a barrel on Tuesday, down from a high of 125 dollars in the last year.
Aramco stock stood at 9.55 dollars a share on Riyadh’s Tadawul stock exchange at close of business on Monday, giving the oil firm a 2.1 trillion dollar (£1.7 trillion) valuation and putting it behind only Apple and Microsoft for the highest market capitalisation in the world.
Separately on Tuesday, Aramco announced it will begin issuing performance-based dividends to shareholders, on top of the dividends it already offers. Its base dividend in the fourth quarter of last year was 19.5 billion dollars (£15.4 billion).