State oil giant Saudi Aramco said Tuesday it would cut spending this year as its profit in the first quarter fell sharply on a historic oil-price rout, amplified by the novel coronavirus pandemic.
The Saudi Arabian Oil Co., as the company is formally known, said net profit fell 25% to 62.5 billion riyals ($16.7 billion), down from $22.2 billion a year earlier. Its revenue in the same period fell 16% year-on-year to $60 billion.
The oil firm expects capital spending between $25 billion and $30 billion this year, down from $32.8 billion a year earlier. Brent crude, the global benchmark, is down more than half this year, trading Tuesday at roughly $30 per barrel.
Oil prices in part tumbled this year because Saudi Crown Prince Mohammed bin Salman–the kingdom’s day-to-day ruler–in March waged an oil-price war with Russia, pledging to flood the market with crude just as the novel coronavirus locked down economies.
The kingdom later agreed an output cut with several other major oil-producing countries, including Russia and the U.S., but that has failed to lift prices substantially.