Analysts predict tripling of Saudi Aramco profit as upstream earnings increase

Analysts predict tripling of Saudi Aramco profit as upstream earnings increase

All eyes will be on the size of Aramco’s dividend, which it maintained at $75 billion last year even as demand for crude and related products collapsed amid the COVID-19 pandemic. Aramco had to turn to the debt market last year to help fund the dividend after its earnings plunged with the onset of the coronavirus pandemic, but oil prices have surged 40 percent in 2021 to around $70 a barrel as major economies reopen, and the rise in demand has enabled OPEC+ to ease output cuts they started early last year. “Aramco is the most sustainable dividends payer and didn’t cut the dividends in 2020, but we don’t expect growth in dividends since Aramco has not cut its dividends in the past when oil prices were lower,” Mazen Al-Sudairi, head of research at Al-Rajhi Capital, told Arab News. The Riyadh-based firm’s dividend is a crucial source of funding for the Saudi government, which is trying to narrow a budget deficit that widened to 12 percent of GDP last year. The world’s biggest energy company’s annual dividend of $75 billion is already the world’s biggest, but the oil producer may have to raise it to follow peers, according to BofA.