Saudi Energy Companies in 2025: Billion-Dollar Profits Defy Market Volatility

Saudi and foreign investors stand in front of the logo of the giant Saudi oil company Aramco during the 10th Global Competitiveness Forum (AFP)
Saudi and foreign investors stand in front of the logo of the giant Saudi oil company Aramco during the 10th Global Competitiveness Forum (AFP)
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Saudi Energy Companies in 2025: Billion-Dollar Profits Defy Market Volatility

Saudi and foreign investors stand in front of the logo of the giant Saudi oil company Aramco during the 10th Global Competitiveness Forum (AFP)
Saudi and foreign investors stand in front of the logo of the giant Saudi oil company Aramco during the 10th Global Competitiveness Forum (AFP)

In 2025, the Saudi energy sector demonstrated a superior ability to fortify its financial gains and navigate global market fluctuations, achieving a net profit exceeding $92.5 billion (347.2 billion riyals). Despite pressures imposed by the global supply-and-demand equation and supply chain disruptions, the financial results of listed companies revealed a strategic shift in performance. Price momentum for oil was no longer the sole driver; instead, operational efficiency and smart hedging emerged as safety valves that ensured the continuity of massive cash flows, with revenues exceeding $430 billion.

While profits recorded a relative decline of approximately 11.5 percent compared to the exceptional year of 2024, when they reached $104.62 billion (392.58 billion riyals), the results showed a positive variance for logistics and drilling companies such as "Bahri" and "ADES." This indicates a new phase of operational maturity and diversification of income sources within the region's most vital sector.

This decline in sector profits is attributed to the falling earnings of "Saudi Aramco," the heaviest weight in the Saudi market index. Other sector companies were also affected by multiple challenges, including declining revenues, lower sales, and reduced dividend distributions from investment portfolios.

Variance in Company Profits

Financial results for energy sector companies showed a variance in performance: profits rose for two companies, declined for one, and another narrowed its losses. Additionally, one company continued its losses, while another shifted to a loss after recording profits during 2024.

In detail, "Saudi Aramco" achieved the highest profit margin among sector companies, reaching $92.75 billion (348.04 billion riyals) during 2025, despite a decline of 11.64 percent compared to the previous year. The company attributed this decline to lower revenues and sales-related income, though this was partially offset by a decrease in operating costs and lower income taxes and Zakat. "Bahri" ranked second with profits of $647.58 million (2.43 billion riyals) during 2025, a growth of 0.12 percent compared to the previous year's profits of $578.29 million (2.17 billion riyals). The company attributed its profit growth to higher total quarters for the oil transport sector and improved operational performance and global freight rates.

"ADES" came in third with profits reaching $218.13 million (818.5 million riyals), achieving a growth of 2 percent compared to the previous year. The company stated that the rise in net profit reflected an increase in depreciation and interest expenses relative to revenues, in addition to gains recorded in the third quarter under "profits from equity instruments at fair value through profit or loss," the impact of which was largely dissipated by costs related to an acquisition deal.

A man passes by the Saudi Stock Exchange logo (Reuters)

Sector Revenues

At the revenue level for sector companies during 2025, there was a decline of approximately 4.74 percent, recording revenues of about $430.12 billion (1.61 trillion riyals) compared to $450.4 billion (1.69 trillion riyals) in 2024, a decrease of $21.44 billion (80.45 billion riyals).

Commenting on these results, Dr. Sulaiman Al-Humaid Al-Khaldi, financial market analyst and member of the Saudi Economic Association, told Asharq Al-Awsat that the energy sector is strategic and vital to the Saudi economy, and these results reflect the continued high profitability of sector companies despite the relative decline. He described this decline as "natural" following the exceptional levels of 2024, reflecting the moderation of oil prices compared to the previous year, alongside the OPEC+ alliance's commitment to production cut policies to support balance.

He noted the decline in revenues resulted from lower prices and volumes despite remaining at strong levels, as well as rising operational and investment costs for some companies, particularly in expansion and renewable energy projects. Conversely, companies like "Bahri" and "ADES Holding" showed positive performance supported by growth in demand for maritime transport and drilling services, reflecting a diversification of profitability sources within the sector.

Al-Khaldi expected the sector to remain stable in the near term with a slight inclination toward growth, supported by several factors including continued global oil supply management to support prices within a balanced range, and Aramco’s expansion into gas, clean energy, and petrochemicals, reducing reliance solely on crude oil. He also noted the improved performance of service companies (drilling and transport) with the increase in regional projects.

Over the medium to long term, he expected the future of sector companies to carry a strategic shift toward focusing on diversifying energy sources through hydrogen and renewables, enhancing operational efficiency, and reducing costs. He highlighted that companies would benefit from Saudi Vision 2030 in supporting investments and infrastructure, noting that the sector remains strong and profitable, and the current decline is a healthy correction after a historical peak, while the trend toward diversification and sustainability will be the primary driver for growth in the coming years.

Operational Factors

For his part, Mohammed Hamdi Omar, CEO of "G-World," told Asharq Al-Awsat that the economic reading of these figures indicates the Saudi energy sector has not lost its strength but has entered a more complex phase than merely achieving high profits.

He added: "We are facing a sector that is still achieving massive profitability levels exceeding 347 billion riyals, but the more important picture is that growth is no longer based on price momentum alone; it has become more sensitive to operational factors, global demand, refining margins, and the variance in performance of companies within the sector."

He explained that the reasons for the decline in sector profits "stem from the exceptional weight of 'Aramco' within the sector; it is not just a company within the sector, but the main driver of the entire financial picture, and any decline in its revenues or profits is automatically reflected in the overall index. Furthermore, the sector did not move as a single bloc; some companies benefited from improved activity or the strength of their business models, such as 'Bahri' and 'ADES,' while others faced clear operational or market pressures. This reflects that the challenge is no longer just in the sector as a whole, but in the quality of positioning within it."

Omar noted that the "decline in total sector revenues indicates that the global energy market has entered a more volatile phase, where high prices alone are no longer sufficient to ensure a balanced improvement in results. Today, operational management, the ability to hedge, diversification of income sources, and supply chain efficiency have become factors no less important than the price itself. Therefore, those who read these results as merely an annual decline in profits are oversimplifying the picture; more accurately, it is an expression of the sector's transition from a phase of easy rents to a phase of more complex operational competition."

Regarding the future financial results of energy companies, he indicated that the sector "will remain a fundamental pillar of the Saudi economy and financial market, but the difference in the coming phase will be between companies that have the ability to adapt to global volatility and those that remain captive to the price cycle. In other words, the future belongs not just to those with scale, but to those with flexibility, financial discipline, and the ability to turn volatility into opportunity."

He viewed the outlook for the coming period as "positive" at the sector level, "but more precise at the company level, as gains will not be distributed equally, but will instead gravitate toward the most efficient, integrated companies that are best able to manage risks in a global environment that remains turbulent."



Ongoing Strait of Hormuz Disruption Could Drag Oil Market Recovery into 2027, Aramco CEO Says

Aramco CEO Amin Nasser speaks at a conference. (Reuters file)
Aramco CEO Amin Nasser speaks at a conference. (Reuters file)
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Ongoing Strait of Hormuz Disruption Could Drag Oil Market Recovery into 2027, Aramco CEO Says

Aramco CEO Amin Nasser speaks at a conference. (Reuters file)
Aramco CEO Amin Nasser speaks at a conference. (Reuters file)

The ongoing energy supply shock is the largest the world has ever experienced, and continued disruption of the Strait of Hormuz could delay oil market normalization into 2027, Saudi Aramco CEO Amin Nasser warned on Monday.

"The longer the supply ‌disruptions continue, even ‌for another few more weeks, it ‌is ⁠going to take ⁠a much longer time for the oil market to rebalance and stabilize," he told analysts on a call to discuss the company's first-quarter results, which were released on Sunday and beat expectations.

The recovery could drag into 2027 if the situation continues until ⁠mid-June, Nasser said.

Iranian authorities effectively blocked ‌the vital waterway ‌in response to the US-Israel attacks on Iran that began ‌on February 28, sending energy prices surging and ‌stoking fears of spiraling inflation and a looming economic downturn.

Aramco has ramped up its East-West pipeline to its expanded capacity of 7 million barrels per day (bpd) to ‌divert crude from its production heartland to the Red Sea port of Yanbu.

⁠Nasser on Sunday ⁠called the pipeline a "critical lifeline".

The market is losing around 100 million barrels of oil for every week the maritime chokepoint remains closed, Nasser said, adding that only two to five vessels are now crossing the strait daily compared to around 70 before the war.

Even if the strait opens today, it will still take months for the market to rebalance, he said.

Nasser, however, predicted a very robust return to demand growth once normal shipping and trade resume.


Saudi Arabia Reshapes Its Industrial Identity... From Assembly to Independent Innovation

A view of the Saudi capital Riyadh. (SPA)
A view of the Saudi capital Riyadh. (SPA)
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Saudi Arabia Reshapes Its Industrial Identity... From Assembly to Independent Innovation

A view of the Saudi capital Riyadh. (SPA)
A view of the Saudi capital Riyadh. (SPA)

Saudi Arabia is moving rapidly and steadily toward building a comprehensive industrial system, surpassing ambitions of mere assembly and importation, but aiming to establish robust engineering capabilities capable of resilience and competition.

This was revealed by a recent report issued by Alvarez & Marsal, and confirmed by Andrea Di Lello, Senior Director of Strategy and Performance Improvement at the company, in an interview with Asharq Al-Awsat.

Saudi localization efforts are distributed across highly strategic sectors, including space, aviation, automotive, shipbuilding, information technology, artificial intelligence, and financial technology. In each of these sectors, local projects connect with major international partnerships, reflecting the depth of the ongoing transformation.

In the aerospace and aviation sector, the Saudi Arabian Military Industries (SAMI) has started locally producing spare parts for F-15 aircraft and airborne electronics systems, while Boeing, Lockheed Martin, and Airbus have signed localization agreements targeting 50% local content. The numbers here tell a remarkable story of growth; the actual localization rate has increased from 4 percent in 2018 to about 20 percent today.

However, Di Lello put these numbers in their proper context, saying agreements with international partners have laid the initial foundations by building operational capabilities and developing advanced infrastructure for maintenance, repair, and overhaul.

He warned that the next phase, which is building engineering capabilities in design and systems integration, is the true added value, and this is where the greatest opportunities lie.

Factories shaping a different future

At the King Abdullah Economic City, Lucid Motors opened the first car factory in the history of the Kingdom, while Ceer Motors is seeking to design and manufacture electric cars locally, and SNAM continues to assemble commercial vehicles with ambitions to transition to full manufacturing.

Asked about the realistic timelines for achieving independence in innovation in these sectors, Di Lello explained that tangible progress can be made within five years.

The critical factor is not the time itself, but the quality of execution, which includes the true definition of achievement and how the knowledge transfer process is organized, he added.

As for the shipbuilding sector, it is based on an ambitious pillar, the King Salman Global Maritime Industries Complex, which aims to localize more than 50 percent of construction activities and drilling platform manufacturing. This is supported by a joint venture with the Korea’s Hyundai Group, which aims to manufacture ship engines and their structural components.

Di Lillo described the complex as a "world-class facility," noting that long-term agreements with major local buyers provide a commercial foundation that is not usually available to most emerging countries in this sector.

The Alvarez & Marsal report does not hide the existing gaps. Di Lillo described them when discussing the readiness of local suppliers, saying that the priority today is to move from an assembly phase to a more mature phase based on independent design, systems integration, and the ability to grant certifications.

He identified the most urgent needs as building a base of "first-tier" suppliers capable of designing complex components and developing local engineering expertise able to modify products and certify them technically.

Regarding joint training programs with global companies, Di Lillo set a fundamental condition for their success, explaining that the programs most capable of producing sustainable outcomes are those that include clear engineering milestones, binding commitments to transfer technology, and a graduated pathway that moves trainees from operational training to possessing design capabilities.

He recommended that future agreements should guarantee clear qualitative outputs, not just participation targets.

The report paid special attention to one competitive advantage: Saudi Arabia’s capabilities in information technology and artificial intelligence. Di Lillo said these capabilities place the Kingdom in an advanced position in terms of readiness for innovation and adoption of modern technologies.

Research and development

The Kingdom currently invests about 0.56 percent of its GDP in research and development, a figure that has grown by more than 30 percent year on year.

Di Lillo stressed that the real opportunity now lies in ensuring that this growing investment is converted increasingly into applied industrial R&D, yielding strong and tangible results in trade and manufacturing.

The report does not overlook external risks, noting that fluctuations in oil prices and tensions in international trade may affect investment flows. However, it viewed these challenges as opportunities to attract talent and highly experienced small and medium-sized enterprises.

The report described the current phase as moving beyond the initial setup and establishment stages to approach “environmental maturity,” which is the third phase of localization. This phase focuses on building unique local knowledge capabilities and includes strengthening self-sustaining companies, establishing innovation centers, deepening local supply chains, and fostering partnerships between universities and industry.


Saudi Aramco Beats Forecasts with Adjusted First-Quarter Income of $33.6 Billion

Aramco President and CEO Amin Nasser speaks at a previous Aramco event. (Reuters)
Aramco President and CEO Amin Nasser speaks at a previous Aramco event. (Reuters)
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Saudi Aramco Beats Forecasts with Adjusted First-Quarter Income of $33.6 Billion

Aramco President and CEO Amin Nasser speaks at a previous Aramco event. (Reuters)
Aramco President and CEO Amin Nasser speaks at a previous Aramco event. (Reuters)

Saudi Aramco reported a sharp rise in first-quarter profit for 2026, beating analyst expectations as higher oil prices and increased crude sales offset geopolitical disruptions linked to shipping constraints in the Strait of Hormuz.

Aramco’s adjusted net income rose nearly 26% to $33.6 billion (SAR126.0 billion), above analysts’ average forecast of SAR109 billion and up from SAR99.8 billion a year earlier, according to a company statement on Sunday.

The company approved a base dividend of $21.89 billion (SAR82.08 billion), in line with its strategy to provide sustainable and growing returns backed by strong cash flow generation and a solid balance sheet.

The results highlighted Aramco’s ability to generate cash flow from operating activities of $30.7 billion despite heightened geopolitical tensions affecting global energy markets.

Iran’s blockade of shipping through the Strait of Hormuz during the US-Israeli conflict disrupted global energy supplies and pushed oil prices higher, prompting Aramco to increase crude flows from its eastern facilities to the Red Sea port of Yanbu through its East-West pipeline network.

Aramco President and CEO Amin Nasser said in this regard: “Our East-West Pipeline, which reached its maximum capacity of 7.0 million barrels of oil per day, has proven itself to be a critical supply artery, helping to mitigate the impact of a global energy shock and providing relief to customers affected by shipping constraints in the Strait of Hormuz.”

“Recent events have clearly demonstrated the vital contribution of oil and gas to energy security and the global economy, and are a stark reminder that reliable energy supply is critical,” Nasser added.

Crude prices climbed from around $65 per barrel in early February to more than $100 in March after Iran closed the Strait of Hormuz, triggering a global energy shock.

Strong revenue and profit growth

Adjusted net income of $33.6 billion (SAR125.97 billion) exceeded analysts’ consensus estimate of $31.16 billion.

The figure reflects underlying operating performance excluding non-recurring items and accounting impacts related to replacement costs, fair-value movements in certain derivatives and financing costs totaling about $1.06 billion (SAR3.96 billion), according to results published on the Saudi stock exchange website.

Net income rose more than 25% year-on-year to $32.04 billion (SAR120.13 billion), compared with $25.51 billion (SAR95.68 billion) in the same quarter of 2025, driven by higher crude oil prices and increased sales volumes.

Revenue increased 7% to $115.49 billion (SAR433.10 billion), supported by higher prices for crude oil, refined products and chemicals, as well as higher sales volumes of crude and chemical products.

On a quarterly basis, net income jumped 72.9% from the fourth quarter of 2025, rising from $18.53 billion to $32.04 billion, helped by stronger margins and lower operating costs despite higher taxes and zakat payments.

Aramco said shareholders’ equity rose 3.9% year-on-year to $408.46 billion (SAR1.5 trillion), while earnings per share reached $0.13 (SAR0.50).

Cash flow and financial position

Cash flow from operating activities totaled $30.7 billion (SAR115.2 billion).

Free cash flow came in at $18.6 billion (SAR69.9 billion), down slightly from $19.2 billion a year earlier, reflecting a strategic increase in working capital of $15.8 billion (SAR59.1 billion) aimed at ensuring business continuity.

The company maintained a strong capital structure, with gearing at 4.8%, up from 3.8% at the end of 2025. Return on average capital employed stood at 20.7%.

Aramco shares rose 0.8% after the results announcement to close at SAR27.42, with trading volume of around 12 million shares.

Dividends and expansion plans

Aramco’s board declared a first-quarter base dividend of $21.9 billion (SAR82.1 billion), up 3.5% from a year earlier, to be paid in the second quarter.

The company also invested $12.1 billion (SAR45.4 billion) in capital expenditure during the quarter as part of plans to expand production capacity and strengthen strategic infrastructure.

Nasser said the company’s first-quarter performance reflected “strong resilience and operational flexibility in a complex geopolitical environment.”

“Despite these headwinds, Aramco remains focused on its strategic priorities and is leveraging both its domestic infrastructure and its global network to navigate disruption,” he stated.

In comments to Reuters, Nasser warned the global oil market could take time to stabilize after recent disruptions.

The world has lost about one billion barrels of oil over the past two months, Nasser said, adding: “Our goal is simple: to ensure energy keeps flowing, even under the pressure the system is facing.”

Resilience

Hussein Al-Attas, a financial and economic adviser, told Asharq Al-Awsat that Aramco’s results demonstrated the strength of its operating model and its ability to benefit from higher oil prices.

“What stands out in these results is not only profit growth, but also the company’s operational flexibility in managing supply chains and exports under complex geopolitical conditions, which preserved strong cash flow levels and sustainable shareholder distributions,” he noted.

Al-Attas said part of the earnings growth was linked to exceptional price increases during the quarter, meaning future profitability would remain closely tied to global oil price trends and supply stability.

For his part, Mohammed Al-Farraj, senior head of asset management at Arbah Capital, said Aramco’s large cash distributions enhanced the stock’s appeal as a defensive investment for institutional and long-term investors, particularly sovereign wealth funds and pension funds.

He told Asharq Al-Awsat that the company’s low production costs and strong balance sheet supported its ability to continue distributing dividends despite energy market volatility.

Al-Farraj also said Aramco’s $3 billion share buyback program, announced in March, reflected management confidence in the company’s valuation and long-term cash generation capacity.

The repurchased shares will be held as treasury shares and allocated to employee stock programs, the company said.

Al-Farraj added that Aramco continued pursuing diversification through investments in natural gas, liquefied natural gas and projects such as the Jafurah field, while also deploying artificial intelligence technologies to improve efficiency and reduce costs.