On Tuesday, Saudi Aramco reported a 25% fall in net profit for the first quarter, as the state-owned oil giant battles with a dramatic fall in crude prices and global oil demand.
The company said net income slid to 62.5 billion riyals ($16.6 billion) in the first three months of the year, down from 83.3 billion riyals over the same quarter in 2019. This was “primarily reflecting lower crude oil prices, as well as declining refining and chemicals margins and inventory re-measurement losses.”
According to the company, this fall in income is mainly due to the decline in crude oil prices along with shrinking margins in the refining and chemical businesses and low global demand.
“The COVID-19 crisis is unlike anything the world has experienced in recent history and we are adapting to a highly complex and rapidly changing business environment,” CEO Amin Nasser said.
The worst consequence of the coronavirus pandemic is the steep fall in the global demand for energy, the company added.
The company also believes that as the global economy revives after the pandemic, the demand for energy will rebound.
However, the company plans to continue to reduce capital spending, Nasser added.
Aramco was listed on the Saudi Tadawul market in December with a historic $29.4 billion initial public offering making it the world’s largest initials, but since then has faced a dry environment.
Last year it reported a 20.6 percent decline in its annual net profit to $88.2 billion due to low oil prices and production levels.
Meanwhile, the oil prices this year fell to a nearly two-decade, losing almost two-thirds of their value because of weak global demand as a consequence of the coronavirus pandemic.