Saudi Aramco's third quarter net profit rises 35% despite adverse events in the Middle East

Saudi Arabia's state-run oil company Aramco announced on the 3rd (local time) that net profit in the third quarter of this year surged 34.5% compared to the same period last year.

According to Aramco's quarterly performance report released today, the company's third quarter net profit recorded $36.25 billion. It also increased by about 11% compared to net profit in the second quarter of this year (USD 32.7 billion).

Based on adjusted net profit, it was $31.2 billion, a 9% increase compared to the same period last year ($28.6 billion). Adjusted net profit also exceeded the median forecast of 12 analysts disclosed by Aramco, which was $30.66 billion.

Free cash flow in the third quarter was $28.2 billion, a 19% increase from the same period last year ($23.6 billion). Aramco's board of directors decided the basic dividend for the third quarter to be $21.9 billion, 3.5% higher than the same period last year. Aramco's dividends are directly related to the financial stability of the Saudi government.

As the war with Iran prolonged, crude oil exports through the Strait of Hormuz were disrupted in the third quarter of this year, and the Bab el-Mandeb Strait at the entrance to the Red Sea was also threatened by Yemeni rebels Houthis, leading to a decline in Aramco's oil production.

However, due to this geopolitical instability, oil prices rose to around $100 per barrel, offsetting the decline in crude oil production.

Aramco CEO Amin Nasser said, “In the third quarter of this year, global energy security was seriously affected by regional uncertainties and attacks on key energy facilities. To further strengthen our global supply chain, we are securing additional overseas storage facilities and continuing to explore alternative export routes.”

Bloomberg News evaluated Aramco's performance improvement as good news for Saudi Arabia, with attention focused on how solid oil revenues are maintained as the Saudi economy is under pressure due to attacks by Houthi rebels.