Oil giants Saudi Aramco has cut its dividends by $10 billion following a fall in its first-quarter profits. This cut has affected funds for Saudi Arabia’s budget amidst the uncertainty surrounding global oil prices.
According to the company’s Q1 results, net income dropped 5% from a year earlier to $26bn, while average realised oil price was $76.30 a barrel, compared with $83 a barrel in the same quarter last year. Aramco also cut its total dividend to $21.4bn from $31bn in the final quarter of last year.
Impact of Lower Payouts
Lower payouts from Aramco dividends will add to pressure on Saudi Arabia’s budget as the government and state-linked entities such as the Public Investment Fund spend billions of dollars to diversify the economy away from its dependence on oil revenues.
The economic diversification programme launched by Crown Prince Mohammed bin Salman features several ambitious so-called gigaprojects, including a futuristic zone in the country’s north-west coast called Neom.
The kingdom’s deficit widened to $15.6bn in the first quarter, up from $3.3bn in the same period in 2024 as oil revenues fell 18 per cent, the Ministry of Finance said on Monday.
Amin Nasser, Aramco’s president and chief executive, said: “Global trade dynamics affected energy markets in the first quarter of 2025, with economic uncertainty affecting oil prices.”
Since the end of the quarter, oil prices have fallen a further 15 per cent, to about $64 a barrel, after US trade tariffs and fears of an oversupply after Opec+, the Saudi-led oil cartel, sharply raised production for the year.
The country is facing a daunting set of deadlines to build infrastructure ahead of hosting a series of big events, including Expo 2030 and the Fifa World Cup in 2034.
