Saudi Aramco on Tuesday reported $31.9 billion in web revenue for the primary quarter, a drop of about 19 % in contrast with the identical interval a yr in the past, primarily due to decrease oil costs.

But with oil costs nonetheless comparatively sturdy, Saudi Aramco stays enormously worthwhile — its earnings have been roughly akin to the quarterly earnings reported by Exxon Mobil, Chevron, Shell and BP mixed — primarily as a result of it produces monumental volumes of petroleum from big fields in Saudi Arabia at comparatively low price.

Prices for Brent crude, the worldwide benchmark, have been about $81 a barrel on common for the primary three months of 2023, in contrast with about $100 a barrel in the identical interval a yr earlier.

Aramco’s major proprietor, the Saudi authorities, just lately orchestrated a cutback in production by the group of countries known as OPEC Plus, apparently aiming to halt falling costs. Prices jumped on that announcement, however then resumed sliding, dipping as little as about $72 a barrel earlier this month earlier than recovering to about $77 by Tuesday.

On a name with monetary analysts, Amin Nasser, Aramco’s chief govt, stated that demand for oil appeared more likely to stay wholesome this yr because the economies of China and India, two main importers, develop strongly. He attributed the current drop in oil costs to considerations that financial development could be sapped by central banks elevating rates of interest, and by the regional banking disaster within the United States. “In our view, the markets overreacted,” he stated.

Aramco can also be investing in increasing output, apparently shrugging off considerations that local weather change dangers would possibly crimp the marketplace for fossil fuels within the coming years.

The firm now has to deal with massive portions of Russian oil flowing into key markets like China and India due to Western sanctions that bar most Russian oil from Europe. Mr. Nasser stated that the Russian oil rerouted to India and China had “no impact” on Saudi gross sales to those international locations, however he stated it had damage different unnamed producers.

Aramco is taking steps to lock up these markets for the long run, by refining and chemical offers, largely in Asia. Recently, Aramco reached agreements to take part in creating a big petroleum complicated in China in addition to to amass a ten % stake in Rongsheng Petrochemical, one other Chinese firm, for $3.6 billion. Aramco stated that the 2 agreements give the Saudi firm the best to provide a complete of 690,000 barrels a day of oil.

Like its Western rivals, Aramco is beneath strain to return more cash to shareholders — on this case primarily the Saudi authorities, which is hungry for money to finance growth plans. Aramco stated it might pay $19.5 billion in dividends for the quarter, a 4 % enhance over the earlier interval.

Aramco additionally stated it might look into devising a mechanism for including what it referred to as “performance-linked” dividends to its fundamental payout. Biraj Borkhataria, an analyst at RBC Capital Markets, an funding financial institution, estimated that Aramco would possibly pay out an extra $12 billion to $18 billion in 2023. In 2022, the corporate paid $75 billion in dividends.

An enhance of that order would elevate the corporate’s payouts to about 4 % of the worth of shares, from about 3.5 %, Mr. Borkhataria stated, including that such funds would nonetheless be under these of the western oil giants in proportion phrases.