Saudi Aramco Says Profit Fell 73 Percent as Demand for Oil Shrank

Saudi Aramco, the world’s largest oil company, said on Sunday that its quarterly earnings plunged more than 73 percent compared to a year ago, as lockdowns imposed to curb the coronavirus pandemic drastically cut the demand for oil and slammed prices.

Despite the steep fall in earnings, to $6.6 billion from $24.7 billion, the company said it would continue paying a quarterly dividend of $18.75 billion, almost three times its cash flow. Aramco is locked into paying such a large amount — $75 billion a year — because of commitments made in the run-up to its listing on the Saudi Tadawul stock exchange.

Nearly all of the dividend money will go to the Saudi government, which owns more than 98 percent of the company.

The results showed other impacts of the fact that Aramco is under the overall direction of the Saudi government. Rather than cutting production as the pandemic took hold, as might have been expected, the company ramped it up under the orders of the government, which was engaged in a price war with Russia.

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