COVID-19 Pandemic Caused Oil Business Saudi Aramco to Lose Over $39 Billion in 2020 Income

By Adriaan Brits Monday, March 22, 2021

Saudi Aramco, the world’s largest oil company and one of the most profitable businesses in the world, has reported a 44% slump in its 2020 net income as a result of the COVID-19 pandemic.

Oil pumps and a rig.

Huge Financial Impact, but Still Highly Profitable Business

Saudi Aramco said it recorded a net income of $49 billion last year, down from $88.19 billion in 2019 as the COVID-19 pandemic wreaked havoc on the oil and gas industries. These results came in slightly lower than the 186.1 billion Saudi riyals ($49.6 billion) expected from the surveyed analysts.

Cash flow from operating activities came in at $76 billion, with the free cash flow standing at $49 billion, the company said in a press release. Despite a lower net income by tens of billions of dollars, the oil business titan still declared a dividend of $75 billion.

The Saudi Arabian government, which owns 98.5% of the company, is hugely dependent on the income from Aramco to fund expenditures in other sectors.
“In one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility,” said Amin Nasser, CEO of the company.

A net income of $49 billion still makes Saudi Aramco one of the world’s most profitable businesses. The return on average capital employed (ROACE) is 13.2%, said Saudi Aramco, which is the highest in the oil business industry.

In 2020, Saudi Aramco recorded a single-day record of 10.7 billion standard cubic feet per day (bscfd) of natural gas in August. A few months earlier, the oil company achieved the highest single-day crude oil production in its history of 12.1 million barrels per day (bpd).

Given the lower income, Aramco said it will decrease capital expenditure (CapEx) spending to $35 billion, from the previously communicated $40 billion to $45 billion. The company spent $27 billion in 2020 amid the cost-saving campaign, down from $33 billion a year ago.

“Looking ahead, our long-term strategy to optimize our oil and gas portfolio is on track and, as the macro environment improves, we are seeing a pick-up in demand in Asia and also positive signs elsewhere,” said Nasser, who reiterated his confidence in exiting the COVID-19 pandemic “in a position of strength.

On a more negative note, Aramco’s production facilities are still a regular target of several attacks. Saudi Arabia and Iran find themselves on the opposite sides of Yemen’s civil war. However, CEO Nasser insists that these attacks yielded “no impact on the business.”

“We have learned a lot, we have been able to demonstrate with a reliability of 99.9% that we are capable, under any scenario, to put the facility back onstream and ensure the safety and security of our people and at the same time ensure that the supplies to our customer is met,” Nasser stressed.


Saudi Aramco, the world’s biggest oil company, witnessed its profit crash by 44% in 2020 amid the COVID-19 pandemic. Still, the oil business decided to declare a $75 billion dividend.

About the Author

Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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