The state-owned oil company announced its 10th straight drop in quarterly profits as a slump in prices hit revenues.
It reported a 22 percent drop in second-quarter profit and said it was cutting costs and looking to divest assets.
“The decrease in revenue was mainly due to lower crude oil prices and lower refined and chemical products prices,” Aramco announced in its quarterly report.
In 2022, Aramco was the world’s largest listed company and, despite being worth $1.5 trillion, it now ranks seventh.
Bloomberg said the Aramco slump would negatively impact much of Crown Prince Mohammed bin Salman’s planned reform and construction plans, collectively known as Vision 2030.
“The core aim of Vision 2030 is to cut oil dependence,” stated Ziad Daoud, Bloomberg Economics’ chief emerging markets economist.
“[Yet] the kingdom has become more reliant on oil.”
He added that Saudi Arabia needs a higher crude price than in 2016 to balance both its budget and current account.
Oil accounts for roughly 61 percent of Saudi Arabia’s revenue, according to its 2025 budget, as well as two-thirds of exports.
The kingdom has already had to scale back Neom, originally billed as a $1.5 trillion megacity project, which organisers claimed would eventually be 33 times the size of New York City and include a 170km straight-line city known as “The Line”.
Instead of 1.5 million people living in the city by 2030, Saudi officials now anticipate fewer than 300,000 residents. Meanwhile, only 2.4km of the city will be completed by 2030.
The Line is one part of Saudi Arabia’s broader Neom project situated on its northwestern Red Sea coast that includes hotels, industrial parks and a ski resort.
Last month, Reuters reported that Aramco was close to a deal to raise $10bn from a group led by BlackRock, and was considering selling up to five gas-powered power plants to raise up to $4bn.
“What we’re looking at across the portfolio is to unlock capital that is currently locked into low – relatively low-return [assets] … invest it in our core investment, which are high return,” CFO Ziad al-Murshed told reporters.
Murshed declined to name the assets, but added: “It is your typical low-return that is tied in things like infrastructure.”
