Aramco keeps $29 billion payout even as oil production falls

livemint.com:

Aramco maintained its dividend to the Saudi government despite a drop in production and weaker oil prices as the kingdom tackles a widening budget deficit. The total payout of $29.4 billion to the state and other investors, including a special component, held at the previous quarter’s level even as lower output helped push net income 23% down year-on-year to $32.6 billion in the third quarter. The world’s biggest crude oil exporter provides much of the Saudi government’s income via generous dividends.

The distribution is becoming ever more vital as Crown Prince Mohammed bin Salman pursues expensive projects such as the futuristic city Neom, the purchase of high-profile footballers, and stakes in sporting leagues while looking to diversify the economy from oil. Also Read: L&T likely to link $4-billion deal win from Saudi Aramco But for now, oil remains key for Saudi finances. The market has shrugged off concerns that Israel’s war on Hamas will spill over to the wider region and threaten global supplies.

Brent crude is back to about where it was before Hamas’s Oct. 7 attack on Israel. That’s keeping the Saudis and their OPEC partner Russia intent on maintaining their unilateral output cuts for now.

They may be forced to prolong those curbs into next year amid signs that the physical oil market is weakening. Demand for fuels such as diesel is softening in Europe in a sign of lackluster economic growth. A global recovery in oil demand is “on track" and growth in China and India should continue into the fourth quarter, Chief Financial Officer Ziad Al-Murshed said on a conference call.