World’s biggest oil company Aramco profit drop

Key takeaways:

1. The financial results of Aramco in 2Q23 have softened compared to those of 2022, given the relative drop in oil prices between the two periods and in line with market expectations. 
2. However, the results still signify that Aramco is in a healthy financial situation, not surprisingly as it is the biggest oil producing and exporting company in the world. 
3. The Saudi economy is oil dependent, therefore whatever profits/losses Aramco incurs do reflect on the performance of the domestic economy. 
4. The Saudi government has announced ambitious projects such as the NEOM city which requires substantial capital. Aramco’s high earnings will translate into high dividends to the Saudi government which will support funding such ambitious projects. 
5. While the west criticizes OPEC+ about cutting oil production and thus raising prices, the producers’ group justifies the cuts as fair in order to sustain their  economies and fund their diversification projects.