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(Bloomberg) — Saudi Aramco reported a decline in profit for a 10th straight quarter as lower oil prices outweighed the impact of higher production.
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Net income attributable to shareholders dropped 19% to 85.63 billion riyals ($22.8 billion) in the second quarter from a year earlier, according to a statement Tuesday. That missed analysts’ estimates compiled by Bloomberg. Free cash flow again failed to cover the dividend.
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The numbers are the latest sign of pressure on Aramco’s balance sheet. Earlier this year, the company said it would lower its dividend for 2025 by a third to about $85 billion, but it’s still struggling to churn out enough cash to cover the distribution. The smaller payout and weaker oil are cutting into Saudi government revenues just as Crown Prince Mohammed bin Salman pushes ahead with ambitious plans to transform the economy.
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Oil prices in London were on average almost $20 a barrel lower in the second quarter compared with a year earlier. Brent crude is currently trading below $70 a barrel, less than the more-than $90 that the International Monetary Fund says the Saudi government needs to balance its budget.
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Aramco has been raising output in recent months as part of a plan by the Saudi-led Organization of the Petroleum Countries and its allies. By September, the country will be able to pump almost 10 million barrels a day, up a million barrels a day from April.
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The higher output from Saudi Arabia and its partners is coming into a fragile global market. Along with a projected slowdown in China and swelling supplies across the Americas, it could contribute to a hefty surplus that the International Energy Agency sees at 2 million barrels per day in the fourth quarter.
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Aramco’s shares have lagged behind the Western oil majors this year. Exxon Mobil Corp. and Chevron Corp., the biggest US oil majors, beat analysts’ earnings expectation in the second quarter after production rose. In Europe, Shell Plc also topped forecasts while TotalEnergies SE missed.
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