Saudi Aramco Q3 Profit Declines Slightly as Oil Prices Fall
Saudi Aramco, the world’s largest oil exporter, reported a 2.3% drop in its third-quarter profit on Tuesday. The decline was mainly due to lower crude and product prices, though the company’s overall performance improved from the previous quarter thanks to rising oil production.
Following the announcement, Aramco shares rose by 1.1% to 25.88 riyals around 5 GMT. The gain reflected investor optimism about higher production levels and improved revenue compared to earlier in the year.
Oil Production Increases as OPEC+ Adjusts Output
Saudi Arabia has been pumping more crude oil as the OPEC+ alliance gradually rolls back voluntary production cuts. These cuts were originally introduced to stabilize global oil prices after years of market volatility.
However, in October, crude oil futures fell for the third straight month, sliding more than 2% and hitting a five-month low on October 20. The decline was driven by fears of an oversupply and concerns about U.S. tariffs and broader economic conditions.
Stronger Quarter-on-Quarter Results
Aramco reported a net profit of 101.02 billion riyals ($26.94 billion) for the three-month period ending September 30, down slightly from 103.4 billion riyals a year earlier. Despite the annual dip, profits rose about 19% compared to the second quarter, driven by higher sales volumes and stronger pricing in both crude and refined products.
Total hydrocarbon production averaged 13.27 million barrels of oil equivalent per day (boepd) during the third quarter, up from 12.8 million boepd in the previous quarter.
OPEC+ recently announced a modest output increase for December and a pause in production hikes in early 2025 — a move interpreted by some investors as a sign of potential oversupply.
Aramco’s adjusted net profit reached $28 billion in Q3, surpassing analysts’ expectations of $26.5 billion, according to company estimates.
Expanding Focus on Natural Gas
Aramco also announced a major update to its long-term gas strategy. The company raised its 2030 sales gas production target to about 80% above 2021 levels, up from its previous goal of 60%. This growth will bring total gas and associated liquids output to roughly 6 million boepd, supported by the Jafurah unconventional gas project.
CEO Amin Nasser highlighted that the Jafurah expansion has attracted strong international investor interest. Recently, Aramco finalized an $11 billion lease and leaseback deal for gas processing facilities at Jafurah, involving a consortium led by BlackRock’s GIP.
Dividends and Government Revenue
Aramco confirmed total third-quarter dividends of $21.3 billion, including around $200 million in performance-linked payments. Although overall dividends are roughly one-third lower this year, they remain a vital source of income for the Saudi government, which owns nearly all of Aramco through direct holdings and the Public Investment Fund (PIF).
Saudi Arabia continues to invest heavily in its Vision 2030 diversification plan, aiming to reduce dependency on oil. Yet, oil still accounted for 62% of government revenue last year, and the IMF estimates the kingdom needs oil prices above $90 per barrel to balance its 2025 budget.
Debt and Market Activity
Saudi issuers, including Aramco, made up 18.9% of the $250 billion in emerging-market dollar debt issued in the first half of 2025, according to Fitch Ratings. The company raised $5 billion in bonds in May and another $3 billion in Islamic bonds in September.
As of September 30, total borrowing rose to $95.1 billion, up from $80.9 billion a year earlier. Aramco’s gearing ratio, a key measure of debt levels, stood at 6.3%, compared with 1.9% at the end of September 2024.
(Exchange rate: $1 = 3.7504 riyals)
