The Saudi Arabian state-owned oil company Saudi Aramco is suffering a steep drop in profits. The fall in prices and the reduction in production affected its turnover.
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Saudi oil giant Saudi Aramco announced sharply lower revenues for the second quarter of 2020.
The publication of financial results indeed reveals a 73.4% drop in profits, compared to the same period last year. The company thus made a net profit of 6.6 billion dollars for April-June 20020 (approximately 5.6 billion euros), against 24.7 billion dollars for April-June 2019.
Overall, for the first half of the year, profits fell by 50% for the oil company.
Saudi Aramco was also dethroned as the world’s largest market capitalization by Apple. A first since the Saudi giant’s IPO in December.
Lower prices and production
In the wake of the health crisis, Saudi Arabia has seen its oil revenues strongly affected by falling prices.
The barrel even fell below $ 20 in April, its lowest level in two decades, according to AFP.
The restrictions on production have also affected the Saudi oil industry. Faced with the fall in demand, OPEC + members had in fact agreed in April to restrict production to 9.7 million barrels per day. Saudi production itself fell to 7.5 million barrels per day in June, far from last year’s average of 10 million barrels per day.
“The turbulence linked to the reduction in demand and the fall in oil prices is reflected in our results for the second quarter”, explains Amin Nasser, CEO of Saudi Aramco in the group’s statement.
Other oil giants have been strongly affected by this crisis, such as BP and Shell, which have announced dividend cuts. A first since World War II for Anglo-Dutch society.
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