LIVE UPDATES
Saudi Aramco, the energy giant and cornerstone of the Saudi Arabian economy, announced a 23% year-on-year decline in its third-quarter profits. The drop from $42.43 billion in the same period last year to $32.58 billion this year was attributed to lower crude oil prices and volumes sold, according to a statement to the Saudi stock exchange.
This marks the third consecutive quarterly drop in net profit for Aramco, which plays a vital role in supporting Crown Prince Mohammed bin Salman's Vision 2030 economic and social reform program to reduce Saudi Arabia's reliance on fossil fuels.
The decline in profits follows a 19.25% drop in the first quarter and a 38% drop in the second quarter compared to the previous year. Saudi Arabia, the world's leading oil exporter, owns 90% of Aramco's shares.
The surge in oil prices caused by Russia's invasion of Ukraine in early 2022, which saw prices briefly exceed $130 per barrel, has now subsided. Jadwa Investment, a Riyadh-based firm, estimated oil prices to be around $85 per barrel for this year. However, the country needs oil prices to be at around $80 per barrel to balance its budget, although production cuts and increased spending can potentially disrupt this balance.
To support global oil prices, Saudi Arabia began production cuts in coordination with other oil-producing nations, reducing output by a total of over one million barrels per day. A voluntary cut of one million barrels per day initiated by Saudi Arabia was introduced in July and will extend through December.
Saudi Arabia's current daily production is around nine million barrels per day, well below its reported daily capacity of 12 million barrels.
