Aramco posts drop in annual profit, announces its first buyback

Saudi Arabia's Aramco (2222.SE), opens new tab, 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 Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. The results come ​at a highly volatile time for global oil markets as ⁠the U.S.-Israeli war on Iran has led to a near-closure of the ​Strait of Hormuz and has forced several regional producers to curb output. Advertisement · Scroll to continue 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. Advertisement · Scroll to continue 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.