By Ali Elias
When Saudi Aramco went public on Riyadh’s Tadawul exchange in December 2019, it was billed as the listing of the decade. It raised approximately $25.6 billion–$29.4 billion, achieving a market capitalization that flirted with $2 trillion—eclipsing global giants and marking a seismic moment for the kingdom’s economy.
Yet today, six years on, Aramco’s financial performance reads more sobering than stellar. Its total return to investors since the IPO is a mere 16%, a figure notably lower than indices for Western oil majors. Meanwhile, experts such as Bloomberg columnist Javier Blas suggest Aramco trails even heavily sanctioned entities like Rosneft in shareholder returns, whereas Exxon, Shell, and Chevron have delivered gains exceeding 50%.
Contributing to the underwhelming performance are persistently low oil prices. Forecasts of softening demand—especially from China—have weighed heavily, sapping investor confidence. Even so, Aramco’s 2024 net income stood at $106 billion, down from $121 billion earlier, prompting a sizable dividend cut to $85.4 billion. In Q1 2025, profits slipped further, registering $26 billion, a 4.6% decline from the previous year, as Brent crude fell sharply.
Another key drag on Aramco’s valuation stems from the broader Saudi economic mission it finances. Crown Prince Mohammed bin Salman’s Vision 2030 hinges heavily on megaprojects like the $500 billion NEOM smart‑city. However, mounting cost overruns, delays, and oil price volatility forced the kingdom’s Public Investment Fund (PIF)—Aramco’s majority stakeholder—to take an $8 billion writedown on gigaprojects, lowering their value by over 12% from 2023 to $56 billion.
Analysts note that despite a rebound in PIF’s overall assets (climbing 19% to $913 billion), the funding for mega‑ambitious ventures is being reevaluated. Many NEOM components are being scaled back or canceled, and spending on some projects has been reduced by 20–60%; in one case, a $5 billion NEOM contract was scrapped entirely.
In addition, while Aramco benefits from being the world’s lowest‑cost oil producer, its high fiscal breakeven, dictated largely by its role as a government cash cow, has pressured its finances. The company resorted to borrowing to maintain dividend payouts, highlighting the mismatch between production efficiency and financial sustainability.
Despite these headwinds, Aramco maintains that hydrocarbons will remain central to global energy and chemical markets. CEO Amin Nasser reiterated the company’s commitment to long term hydrocarbons demand—even as short‑term realities necessitate fiscal retrenchment.
In summary, what began as a triumphant IPO aimed at morphing Aramco into a diversified global champion has instead become a cautionary tale: oil price volatility, ambitious diversification cost, and constrained investor returns now shape its narrative more than its initial $2 trillion promise.
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