By Christian Moess Laursen

Saudi Arabia’s national oil company Aramco said its third-quarter profit fell as its downstream division posted a loss due to low refining margins and it planned to pay $31.05 billion in dividends.

Saudi Arabian Oil Co., known as Aramco, said Tuesday it posted quarterly net profit of $27.56 billion, down from the $32.58 billion reported for the same period last year. last year.

Analysts were expecting $26.89 billion, according to a consensus averaged by Visible Alpha.

Lower crude oil prices and weakening refining margins weighed on results, the company said.

Aramco’s profit fall follows a trend seen among the world’s largest hydrocarbon producers, with companies on both sides of the Atlantic suffering from weak oil prices and weak refining margins in the third quarter .

Oversupply and a deteriorating global demand outlook sent prices of Brent crude oil, the international oil benchmark, to their lowest level in three years in September. Low oil prices have prompted the Organization of the Petroleum Exporting Countries and its allies to take a cautious approach.

Over the weekend, a group of eight OPEC+ members, led by Saudi Arabia and Russia, opted to extend voluntary production cuts until the end of December. They had initially planned to begin returning 2.2 million barrels per day of marginal supply to the market in October.

Saudi Arabia’s oil minister had warned that prices could fall as much as $50 a barrel if OPEC decided to bring back limited supply, the Wall Street Journal reported last month.

OPEC and the International Energy Agency cut their global demand forecasts for the third time in a row last month, citing slowing demand in China, the main crude importer.

Aramco said the average price received for its crude oil products during the quarter fell to $79.3 per barrel from $89.3 per barrel last year.

At the same time, global refining margins have fallen sharply due to weaker demand and new refineries coming online.

This led Aramco’s downstream business to post a loss of $1.78 billion, compared to a profit of $5.26 billion last year. The segment handles the refining of crude oil and gas into fuel, while margins indicate the difference between the cost of crude oil and the value of refined products.

Profits at its upstream division, which includes oil and gas extraction, fell 13 percent to $52.82 billion due to weak prices and lower volumes sold. Its quarterly oil and gas production fell slightly, to 12.7 million barrels of oil equivalent per day, from 12.8 million barrels a year ago.

The company, one of the world’s most valuable companies by market capitalization, declared a base dividend of $20.28 billion and a performance dividend of $10.77 billion to be paid in the fourth quarter. It declared a base dividend of $19.5 billion and a performance dividend of $9.9 billion in the third quarter of 2023.

Saudi Arabia, the world’s largest oil exporter, holds around 81% of the company’s capital. Aramco’s payments help the kingdom finance ambitious megaprojects and diversify its economy beyond oil. It plans to pay $124.2 billion in dividends in 2024.

Write to Christian Moess Laursen at [email protected]

(END) Dow Jones Newswires

November 5, 2024 2:21 a.m. ET (07:21 a.m. GMT)

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