TEHRAN (Iran News) – Energy giant Saudi Aramco said on Sunday its second-quarter profits plunged a massive 73 percent due to sharply lower oil prices as the coronavirus pandemic crisis undercuts global demand.
The behemoth posted a net profit of $6.6 billion for the three months to June 30 compared to $24.7 billion for the same period of 2019, AFP reported.
The results are in line with analysts’ expectations but stand in contrast to the losses reported by its rival energy giants, which are reeling from a drop in oil demand since the start of the novel coronavirus pandemic.
“Strong headwinds from reduced demand and lower oil prices are reflected in our second-quarter results,” Aramco’s chief executive Amin Nasser said in a statement.
Aramco’s net profit for the first half of the year also slumped by 50.5 percent to $23.2 billion, compared to $46.9 billion in the same period last year.
Amid low crude prices, Aramco is looking at cutting its 2021 budget by between eight and 10 percent from this year’s already reduced levels, the Energy Intelligence group reported last month.
“Cutbacks have already caused Aramco to delay plans to expand production from its offshore fields,” Energy Intelligence said in a report.
The company has also slashed hundreds of jobs as it seeks to reduce costs, Bloomberg News reported in June.
Saudi Arabia, the world’s biggest crude oil exporter, has been hit hard by the double whammy of low prices and sharp cuts in production.
A sharp drop in oil income is expected to hinder Crown Prince Mohammed bin Salman’s ambitious plans to overhaul the kingdom’s energy-reliant economy.
Oil prices dropped to a two-decade low below $20 a barrel in April and May as the coronavirus dampened demand, before recovering to around $44 a barrel after the OPEC+ producers agreed to record output cuts.
Following the move, Saudi oil production dropped to 7.5 million barrels per day in June, compared to last year’s average of 10 million bpd.
- source : Iran Daily, Irannews