Aramco profit plunges for 10th quarter as oil prices drag amid ballooning debt

Dubai: Saudi Aramco's net profit declined for a tenth straight quarter as lower crude prices and higher production costs strained its financial performance.

The oil giant reported a 19% drop in Q2 2025 net income to 85.63 billion riyals ($22.8 billion), falling short of analysts' expectations and marking a four-year low.

Despite steady dividend payments, the company’s free cash flow fell 20% to $15.2 billion, insufficient to cover its $21.36 billion quarterly dividend. Net debt rose to $30.8 billion, up from $24.7 billion in the previous quarter, lifting Aramco's gearing ratio to 6.5%.

Brent crude averaged nearly $20 per barrel lower year-on-year, with prices around $68—well below the $90-per-barrel level Saudi Arabia needs to balance its budget, according to the IMF.

Aramco had already signaled a planned cut in its 2025 dividend to $85 billion, but its balance sheet continues to feel the pressure. CEO Amin Nasser said the company remains confident about global oil demand and anticipates a more than 2 million bpd increase in H2 2025.

The company has kept its capital expenditure target unchanged at $52–$58 billion for the year and is seeking outside investment in infrastructure assets to free up funds.

Aramco is also exploring new types of debt instruments, including commercial paper and diversified currency issuances, to appeal to broader investor bases, said CFO Ziad Al-Murshed.

The number of active oil rigs in Saudi Arabia declined following the completion of certain projects and the kingdom's decision to hold its maximum sustainable capacity at 12 million bpd, abandoning earlier plans to raise it to 13 million, said Nasser, on a call with analysts on Tuesday.

The number of active rigs targeting oil in the kingdom dropped to its lowest in more than two decades in July, according to Baker Hughes data. The active rig count is an important metric for analysts following global oil markets. Including production testing, completions or workovers rigs and those under mobilization, there are more than 230 drilling rigs across Saudi Arabia, Baker Hughes said on Sunday.

However, Aramco is ramping up natural gas activity, with plans to increase output by over 60% by 2030 compared to 2021 levels.

Aramco shares have underperformed global peers in 2025, down 14% so far this year. Western rivals like ExxonMobil and Chevron beat expectations in Q2, aided by higher production. Shell also topped forecasts, while TotalEnergies missed.

- with inputs from Agencies