RIYADH, Nov 7 ― Energy giant Saudi Aramco today posted a 23-per cent year-on-year drop in profits for the third quarter, the result of lower oil prices and production cuts.

The drop from US$42.43 billion (RM197.5 billion) last year to US$32.58 billion "principally reflects the impact of lower crude oil prices and volumes sold”, the firm said in a statement to the Saudi stock exchange.

It follows a drop in net profit of 19.25 per cent in the first quarter and 38 per cent in the second quarter compared to 2022.

Russia's invasion of Ukraine in February 2022 prompted oil prices to skyrocket, peaking at more than US$130 per barrel.

Aramco reported what it described as record profits for the year totalling US$161.1 billion, giving the kingdom its first annual budget surplus in nearly a decade.

Prices this year are estimated to be around US$85 per barrel, Riyadh-based firm Jadwa Investment said in a report in late October.

Analysts say the kingdom needs oil to be priced at around US$80 per barrel to balance its budget, though that could be thrown off by production cuts and ramped-up spending.

The world's biggest crude oil exporter in April announced it was slashing production by 500,000 barrels per day, part of a coordinated move with other oil powers to curb supply by more than one million bpd in a bid to prop up prices.

In June, the Saudi energy ministry announced a further voluntary cut of one million bpd which took effect in July.

That cut will last through December, the ministry confirmed on Sunday.

The kingdom's daily production is now approximately nine million bpd, far below its reported daily capacity of 12 million bpd. ― AFP