Aramco Slashes $40 Billion in Dividends Amid Saudi Fiscal Pressures


Saudi Aramco, the world’s most valuable oil company, has announced a major cut in its dividend payouts for 2025, signaling mounting financial pressure on the Kingdom as it presses ahead with its costly economic transformation plans.


The oil giant plans to distribute $85.4 billion in total dividends this year, a significant drop from the $124.2 billion paid in 2024 — a reduction of nearly $40 billion. The move has sparked concerns about Saudi Arabia’s ability to finance its ambitious Vision 2030 agenda, which relies heavily on Aramco's profits to bankroll infrastructure and diversification projects.

Performance-Linked Payouts Plunge 98%

The sharpest decline came in the form of performance-linked dividends, which are set to fall from $43.1 billion in 2024 to just $900 million in 2025 — a staggering 98% decrease.

The dividend cuts reflect a broader decline in Aramco’s financial performance. Net income dropped by 12%, from $121.3 billion in 2023 to $106.2 billion in 2024, driven by weaker oil prices and reduced production volumes amid global economic uncertainties.


Saudi Budget at Risk

Aramco’s dividend payouts are a crucial source of revenue for the Saudi government, especially as it finances multi-billion-dollar projects such as NEOM, the Red Sea Project, and other initiatives aimed at reducing the Kingdom’s dependence on oil.

Analysts warn that the reduction in payouts could widen the budget deficit and force Saudi authorities to increase borrowing or scale back public spending. According to reports from Arab Gulf Business Insight (AGBI), the Kingdom may face a fiscal shortfall that challenges the momentum of its transformation efforts.

Investments Continue Despite Tightening

Despite the cut in payouts, Aramco has reaffirmed its commitment to capital spending. The company plans to invest between $52 billion and $58 billion in 2025, focusing on long-term energy infrastructure and expansion projects.

Company executives remain optimistic, citing an expected increase in global crude demand and plans to ramp up production as OPEC+ eases supply restrictions beginning in April.

Outlook: Diversification in Focus

The dividend reduction underscores the vulnerabilities of oil-dependent economies amid fluctuating energy markets. While Aramco remains one of the world’s most profitable companies, the dramatic drop in payouts signals a potential recalibration of Saudi Arabia’s fiscal strategy.

As Vision 2030 enters a critical phase, the Kingdom's ability to balance economic transformation with fiscal discipline will be closely watched by investors and global markets alike.

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