DUBAI, United Arab Emirates (AP) – Oil giant Saudi Aramco said Sunday its net income dropped by $22.9 billion in 2019 to $88.2 billion, a sharp decrease coming as the kingdom stands ready to flood an already-weakened global energy market amid the new coronavirus pandemic.
The announcement by the firm formally known as the Saudi Arabian Oil Co. did not address the demand by the kingdom it up production after a meeting between OPEC and Russia failed to see nations agree to a production cut. That led to a 25% plunge in the price of crude, the sharpest decline seen since the 1991 Gulf War.
International benchmark Brent crude traded over $33 a barrel Sunday, with analysts worried the price could further drop. While that makes gasoline cheaper for consumers and airlines, it also affects U.S.-based oil companies and others now struggling with lower economic growth amid the virus pandemic.
Saudi Arabia and the United Arab Emirates afterward said they stood ready to increase production at the end of the month, when the so-called OPEC-Plus production cuts earlier agreed to end. The Saudis have slashed oil prices and they’d ramp up production to 12.3 million barrels a day in April, a record.
The Saudi government also directed Aramco to increase output capacity to 13 million barrels a day. The UAE, home to Abu Dhabi and Dubai, said it would stand ready to increase production to 4 million barrels of crude a day, up from the 3 million it now pump.
The Aramco results did not address the current turmoil in the market. However, Saudi Aramco President and CEO Amin H. Nasser did address the new coronavirus and the COVID-19 illness it causes in a statement released alongside the results.
“The recent COVID-19 outbreak and its rapid spread illustrate the importance of agility and adaptability in an ever-changing global landscape,” Nasser said.
The results come as Aramco now trades a sliver of its worth on Riyadh’s Tadawul stock exchange. Aramco stock traded Sunday still below its initial public offering price.
It marks a new turn for the oil company, which previously remained a private company that didn’t need to announce results.