Saudi Aramco, once the world’s most profitable company, has reported its 10th straight quarterly loss in Q2 2025, marking the longest financial slump in its 90-year history. The $2 trillion oil giant posted a $4.3 billion net loss, compounding a crisis that began in late 2023 when oil prices first collapsed below production break-even levels. This unprecedented losing streak comes despite Aramco’s legendary low production costs of $3/barrel, revealing deeper structural challenges in global energy markets (Bloomberg Energy 2025).
The Perfect Storm: Factors Behind Aramco’s Decline
1. Chronic Oil Price Suppression
Brent crude has traded between $52-$58/barrel throughout 2025 – far below Aramco’s $78/barrel fiscal breakeven needed to fund Saudi Arabia’s national budget (IMF 2025). This reflects:
- Weak Asian demand (China’s oil imports down 18% YOY)
- U.S. shale resilience (production holding at 13.2M bpd)
- Strategic overproduction by Russia and Venezuela
2. Energy Transition Accelerating Faster Than Expected
Renewables now account for 23% of global energy (vs. 12% in 2020), with EV adoption reaching 38% of new car sales in key markets (IEA 2025). Aramco’s downstream investments have failed to offset upstream losses.
3. Geopolitical Costs Mounting
The company bears extraordinary burdens as Saudi Arabia’s economic engine:
- $42 billion/year in dividends to the Saudi government
- $110 billion committed to Vision 2030 projects
- Yemen war costs indirectly impacting operations
Financial Fallout: By the Numbers
Aramco’s Q2 2025 results reveal alarming trends:
- Revenue: $89.1B (down from $161B in Q2 2022)
- Debt-to-Equity: 0.31 (up from 0.12 pre-slump)
- Dividend Yield: 3.2% (down from 8.4% at IPO)
- Market Cap: $1.67T (18% below peak valuation)
The company has burned through $28B in cash reserves since 2023 just to maintain dividends (S&P Global 2025).
Contrast With Peers: Why Aramco Suffers More
While all oil majors face transition pressures, Aramco’s losses are uniquely severe:
- ExxonMobil returned to profitability in Q1 2025 via chemicals
- Shell is cushioning blows with LNG and renewables
- ADNOC benefits from UAE’s more diversified economy
Aramco’s 90% reliance on crude (vs. 60% for peers) makes it exceptionally vulnerable (Rystad Energy).
Desperate Measures: Aramco’s Survival Strategy
1. Production Cuts Backfiring
Aramco’s 1M bpd voluntary cuts since 2023 have:
- Cost $12B in lost revenue
- Failed to meaningfully boost prices
- Ceded market share to Iraq and UAE
2. Downstream Diversification Stumbling
The $69B acquisition of SABIC has underperformed, with chemicals margins at 6-year lows. Blue hydrogen projects face 30% cost overruns.
3. Unprecedented Debt Markets Reliance
Aramco has issued $45B in bonds since 2024 – more than the prior decade combined – just to fund operations.
The Saudi Dilemma: Reform or Crisis?
With Aramco contributing 62% of government revenue, the Kingdom faces impossible choices:
- Accept lower dividends (risking social spending cuts)
- Accelerate privatization (potentially at fire-sale prices)
- Abandon oil price defense (triggering market chaos)
Crown Prince MBS has reportedly ordered emergency scenario planning for $40 oil (WSJ 2025).
Expert Predictions: Can Aramco Recover?
Energy analysts are divided:
- Bull Case (Goldman Sachs): “Aramco will rebound when oil hits $70+ in 2026”
- Bear Case (Bernstein): “Structural decline requires halving dividends”
- Transition Scenario (IEA): “Must redirect 60% of capex to non-oil by 2027”
The most likely path involves:
- Gradual dividend reductions (to 2-3% yield)
- Radical cost cutting (targeting $8/barrel production cost)
- Mega-partnerships (possibly with Chinese energy giants)
The End of the Oil Age’s Last Supermajor?
Aramco’s 10-quarter losing streak isn’t just a cyclical downturn—it’s a warning about the unsustainability of petrostates in a decarbonizing world. While the company will likely survive via sovereign support, its era of unrivaled dominance appears over. The coming years will test whether this symbol of oil’s golden age can transform fast enough to avoid becoming the Kodak of energy.