Lower oil revenues weigh down on Aramco’s results: Saudi Aramco’s net income dipped 22% y-o-y to just above SAR 85 bn (USD 22.7 bn) in the second quarter, slightly underperforming the median estimate of 17 analysts at USD 23.7 bn, according to an earnings release (pdf).

The decline in net income came as revenue and sales income decreased 13.4% to SAR 407.1 bn (USD 108.6 bn), compared to the same period last year. Lower operating expenses and Zakat taxes helped cushion the blow.

First half performance: Net income reached SAR 182.6 bn (USD 48.7) bn in 1H 2025, down 13.6% y-o-y. Revenue and sales income inched down 7.8% to just shy of SAR 836.8 bn (USD 223.1 bn).

The drivers: The world’s largest oil company said the waning revenues were due to lower prices for crude oil, which logged an average realized price of USD 66.7/bbl, significantly down from USD 85.7/bbl in the same period last year. Lower prices of refined and chemical products also weighed down on income but were partially offset by higher sales.

The impact was expected: US tariffs and Opec+ hikes are starting to hit Aramco’s numbers this quarter, as Saudi’s oil revenues inched down 29% y-o-y in 2Q.

Capex is set to miss full-year guidance: Capital expenditure reached USD 24.9 bn in the first half, “running lower than [Aramco’s] guidance of USD 52-58 bn for the full year,” RBC analysts said in a note seen by CNBC. Spending tends to pick up in the second half of the year, but capex for the full year is expected to settle at the lower end of the range, RBC added.

The dividend situation: Aramco will distribute SAR 80.1 bn (USD 21.4 bn) in 2Q dividends on 28 August at SAR 0.33 per share, with performance dividends slashed to an inch of their life at some SAR 820 mn.

Moving further into debt: Free cashflow logged a 20% y-o-y decrease to SAR 57.1 bn (USD 15.2 bn), coming in lower than dividends and pushing the company into a net debt position of SAR 115.6 bn (USD 30.8 bn) for the quarter, up from USD 24.7 bn in 1Q 2025. The gearing ratio — an indicator of borrowing levels — was up to 6.5%, compared to 5.3% in the first quarter.

Supply and demand to pick up in 2H? “Market fundamentals remain strong, and we anticipate oil demand in the second half of 2025 to be more than 2 mn barrels per day higher than the first half,” CEO Amin Nasser said in the release. Crude output is slated to increase in 2H after Opec+ completed the unwinding of 2.2 mn bpd in output instituted in 2023 this week, bringing Saudi Arabia’s quota to 9.75 mn bbl/d in its meeting.

Future plans: Aramco aims to unlock capital tied in “relatively low-return assets” like infrastructure, and invest in higher-return core investments, CFO Ziad Al Murshed said in an earnings call. The company is also looking at different geographies, currencies and instruments for debt issuances this year, Al Murshed added.

Market reax: The oil major’s shares was up 0.9%, closing at SAR 24.12. The price is down 14.1% YTD, despite Western oil companies’ stock prices rising, closing the premium gap that Aramco previously enjoyed over Western peers, according to Bloomberg analysts.

The news made the rounds in the international press: Reuters | CNBC | Bloomberg

Tags: