Saudi Arabia’s state-run oil giant Saudi Aramco has announced a sharp drop in its 2019 profit, falling well below expectations and coming a week after a reported oil dispute between Moscow and Riyadh sent oil prices plunging.
The report, published by Aramco, showed that the company’s full-year 2019 net profit amounted to $88.12 billion, down by almost 21 percent from $111.1 billion the year before. The figure appeared to be well below analysts’ expectations; they’d projected the oil giant could earn around $92.6 billion.
The company itself explained the losses, citing “lower crude oil prices and production volumes, coupled with declining refining and chemical margins, and a $1.6 billion impairment associated with Sadara Chemical Company.”
This situation did not stop Aramco from retaining its position as the most profitable company, though, as it still beat other firms in this respect, including such western giants as Exxon Mobil Corp or Apple. Still, the news might not sit well with the company’s board, as its shares continue to fall for the second week in a row, three months after the initial public offering (IPO).
Last week, Aramco’s shares fell below the IPO price of 32 riyals ($8.53) to 30 riyals ($7.99), only to fall even further this Sunday to 28.9 riyals ($7.70). The situation on the oil markets does not look particularly rosy to the oil giant either.
Oil prices suffered a massive crash on Monday, dropping by almost 30 percent following the news about disagreements between Russia and the members of OPEC on the future of its current deal that expires next month. The strife was even described as an oil price war between Moscow and Riyadh, even though neither side actually described it as such.
The news was quickly followed by reports about Saudi Arabia’s plans to triple its oil shipments to Europe at massive discounts, in a move that risks crushing prices once again.