Aramco, officially known as Saudi Aramco (Saudi Oil Company), has once again become the center of the world’s attention—this time not only because of its scale but also due to the complex financial and strategic decisions reshaping the energy sector landscape. As one of the world’s most valuable and influential energy companies, any change in Aramco’s performance or policies impacts global markets, government budgets, and the future of the energy sector.
Recently, Aramco made headlines by announcing the largest profit adjustment in history, accompanied by a significant decline in its annual net profits. These announcements come against a backdrop of increasing oil price volatility, changes in geopolitical tensions, and challenges to traditional oil business models, signalling a long-term global energy transition.
In its latest earnings report, Aramco confirmed that profits had decreased by 12%, with net profits of $106.25 billion for 2024, compared to $121.3 billion in 2023. While this profit figure is substantial by global standards, this decline indicates the pressure that even the largest players in the oil sector are facing in an environment of fluctuating oil prices, declining profit margins, and rising production costs.
In any case, what has drawn global attention is the company’s decision to reduce its total dividend payment to $85.4 billion for the year, down from $124.2 billion last year. This nearly 31 percent decrease signifies a significant shift, as Aramco’s traditional strategy has been to maintain dividends—even during downturns—as a stable source of income for its shareholders, particularly for its largest owner: the Saudi government.
This cut in dividends is especially noteworthy as the company has historically offered the world’s largest dividend payments. Investors and analysts are now reassessing the company’s future payment capacity and its broader implications, which may affect energy investments, national budgets, and shareholder confidence.
From a governmental perspective, Aramco’s changes have profound effects. The company’s profits are the backbone of national income, which helps finance large infrastructures, economic diversification projects, and social programs. A decrease in this income could lead to changes in public spending, a potential sale of shares, or increased attention to non-oil sectors to maintain national financial stability.
The company also plays a central role in supporting Vision 2030, which is an ambitious project aimed at transforming the country’s economy by reducing dependence on hydrocarbons. This includes the development of tourism, leisure, smart cities like Neom, and technological innovation hubs. Therefore, Aramco’s performance is directly linked to the success of these national transformation goals.
