Despite facing a 25% decrease in profits, Saudi Aramco, the oil behemoth, has declared an ambitious dividend hike for its shareholders. The company’s earnings dropped to $121 billion in 2023, following a year of record-breaking profits fueled by the geopolitical tensions affecting oil prices. However, this figure still marks the second-largest profit in the company’s history, underscoring its financial strength.

In response to the profit decline, exacerbated by a cut in oil production and a drop in oil prices to $85 a barrel from the previous year’s high of $130, Aramco has announced an increase in dividends to $98 billion. This move signifies a significant boost, nearly one-third greater than the previous year’s payout, reflecting the company’s commitment to rewarding its shareholders amidst challenging market conditions.

Amin Nasser, Aramco’s CEO, highlighted the company’s resilient performance in the face of economic downturns, attributing its success to strategic agility and sustained cash flow. The majority state-owned entity has played a crucial role in Saudi Arabia’s economic surplus in 2022, with nearly 95% of Aramco’s shares held by the state.

Looking forward, Aramco aims to diversify its investment portfolio, eyeing significant ventures in China’s expanding oil market and renewable energy sectors within Saudi Arabia. These strategic moves are part of Saudi Arabia’s broader agenda to diversify its economy away from oil dependency.

Aramco’s plans include further investments in Chinese refineries and potentially engaging in a collaboration with Renault and Geely on hybrid car engines. With a positive outlook for the oil market in 2024, Aramco anticipates a “fairly robust” demand, particularly from China, indicating a strategic pivot towards emerging opportunities in the global energy landscape.