Aramco cut its dividend to ease financial strain, impacting Saudi Arabia’s budget deficit. The payout is set to drop to $85 billion in 2025 from $124 billion last year, affecting government borrowing needs.Aramco’s dividend is crucial for Riyadh as Crown Prince Mohammed Bin Salman advances his economic transformation plan.
However, the hefty payouts have strained Aramco’s finances, pushing it from a $27 billion net cash position to net debt.Aramco’s record dividend included a base payment and a performance-linked portion. From 2025, the special payout will depend on free cash flow after covering the base dividend and investments.
With 2025 cash forecasts below the base dividend, extra payouts seem unlikely.Aramco reported a 12% drop in net income to $106.2 billion in 2024.
