Saudi Aramco reported a decline in profits in the first quarter, causing its dividend to be cut by $1 billion and lowered the main source of funding for the Saudi Arabian budget, while oil prices are uncertain.
Net revenue of the world's largest oil company fell 5% to $26 billion from the same period last year. Its average oil price is $76.30 a barrel, compared with $83 a barrel in the same quarter last year.
Although performing better than some of its peers, including BP and Shell, whose first-quarter profits were cut in half, down 28%, respectively, Aramco lowered its total dividend to $21.4 billion from $31 billion in the last quarter of last year.
The group had announced in March that total spending this year was about $85 billion, significantly lower than the $12.4 billion paid in 2024.
Lower spending from ARAMCO dividends will increase pressure on the Saudi Arabian budget as government-state-linked entities, such as public investment funds, spend billions to diversify the economy from dependence on oil revenues.
The economic diversification plan initiated by Crown Prince Mohammed Bin Salman has several ambitious so-called Gippro investments, including the futuristic region on the northwest coast of the country, called Neom.
The country's finance ministry said on Monday that the kingdom's deficit expanded to $15.6 billion in the first quarter, up from $3.3 billion in the same period in 2024, as oil revenues fell 18%.
“Global trade momentum affected the energy market in the first quarter of 2025, and economic uncertainty affected oil prices,” said Amin Nasser, president and CEO of Aramco.
Oil prices fell 15% to $64 a barrel since the end of the quarter, following U.S. trade tariffs and concerns about OPEC+, a sharp increase in the year after U.S. trade tariffs and oversupply of Opec Lead’s Optel Cartel, which has fallen by another 15% to $64 a barrel.
Aramco has no guidance on whether it must adjust its dividend further or cut spending, but points out that “capital planning and execution of discipline” is crucial during oil price fluctuations.
Riyadh has recalibrated its spending by scaling down some projects and extending others over a longer period of time.
However, the country faces a series of daunting deadlines to build infrastructure ahead of a series of large events, including the 2030 Expo and the FIFA World Cup.
The government and PIF, the main wealth fund of Saudi Arabia, jointly own more than 97% of Aramco.
Despite lower oil prices, Saudi Arabia and fellow OPEC+ alliances are still increasing production.
Earlier this month, eight OPEC+ members, including Saudi Arabia and Russia, said they would increase supply daily in June, the second time in a row to increase their supply monthly output.
Jorge León of energy consulting firm Rystad said it was a "blockbuster" decision at the time, reflecting the organization's strategic shift.