Aramco posts drop in annual profit, announces its first buyback

Saudi Arabia’s Aramco, the world’s top oil exporter, reported a 12% drop in annual profit mainly due to lower crude prices, but announced it would repurchase up to $3 billion worth of shares in its first-ever buyback.

The buyback program will be conducted over the next 18 months.

Until now, the company has relied on its massive dividend payouts to reward shareholders.

The results come at a highly volatile time for global oil markets as the US-Israeli war on Iran has led to a near-closure of the Strait of Hormuz and has forced several regional producers to curb output. Brent crude, which surged to near $120 on Monday, is trading around $93 on Tuesday.

Aramco reported $93.4 billion in net income for 2025, below an LSEG consensus estimate of $95.6 billion. For the fourth quarter, net profit tumbled 20.5% to nearly $17.8 billion on higher operating costs, marking its 12th consecutive quarter of year-on-year profit decline.

Aramco confirmed paying a base dividend of $21.1 billion for the fourth quarter and $219 million in performance-linked dividends, a mechanism calculated based on free cash flow introduced following bumper profits in 2022 following the Ukraine war. Total dividends paid for the year were $85.5 billion, down from $124 billion in 2024.

Aramco has long been a cash cow for the Saudi state, which relies on fossil fuels for more than half of government revenues.

The kingdom directly holds nearly 81.5% of the company and its sovereign investor, the Public Investment Fund, holds another 16%. Total revenue for the year fell 7.2% to $415.8 billion, on weaker prices for crude oil, as well as refined and chemical products.

The company’s gearing ratio - a measure of indebtedness — dropped to 3.8% at the end of 2025, down from 4.5% at the end of 2024.