Saudi Aramco Q1 Profit Falls; Cash Flow Strained

Saudi Aramco reported a 4.6% decline in first-quarter net profit, with income dropping to $26 billion from $27.2 billion a year earlier due to lower global oil prices and higher operating costs. Revenue rose slightly to $108.1 billion, driven by increased sales volumes of gas and refined products, but free cash flow fell to $19.2 billion, remaining below the total dividend payout. The company declared a base dividend of $21.1 billion and a performance-linked dividend of $200 million, despite the ongoing cash flow shortfall. Aramco's results slightly exceeded analyst expectations but reflect continued financial strain from volatile oil markets and higher OPEC+ output. The Saudi government, which relies on Aramco’s income to fund major initiatives like the $500 billion Neom city, may need to tap reserves or borrow as oil prices stay subdued. The outlook remains uncertain with further OPEC+ output increases expected to pressure prices.