Saudi Aramco’s Q4 2022 profit may slip to nearly $39bln on lower oil prices

Saudi Aramco’s Q4 2022 profit may slip to nearly $39bln on lower oil prices

Saudi Arabian Oil Company’s (Saudi Aramco) net profit in the fourth quarter (Q4) of 2022 is likely to decline 6.3% quarter-on-quarter to 146.22 billion Saudi riyals ($38.90 billion), Riyadh-based Al Rajhi Capital said in a new report.

The lower quarterly profit will be due to a weak demand outlook amid a possible global economic slowdown.

China’s “zero Covid policy” dampened the market sentiments, pressurising oil prices, the brokerage noted.

“Lower oil production amid the OPEC+ production cut deal, coupled with weak oil prices, may impact Aramco’s earnings sequentially in Q4 2022,” the report added.

Nevertheless, Saudi Aramco’s net profit in the fourth quarter of 2022 will still rise 25.4% year-on-year (YoY).

In November 2022, the Saudi-listed firm posted a nearly 39% (YoY) in Q3 net profit at $42.4 billion, driven by higher oil prices and increased sales volumes. The integrated oil and gas company declared a cash dividend of $18.8 billion, in line with its own target, to be paid in Q4 2022.

According to Al Rajhi Capital, the Saudi petrochemical sector may continue witnessing pressure on earnings in the fourth quarter of 2022 by weak product spreads and lower product prices.

“Overall, we expect lower product prices amid weak demand to lower product spreads, signaling a