The World’s Largest Oil Producer Slips Into a Net Debt Position
Saudi Aramco Debt Becomes New Reality as Revenues Dip
– Saudi Aramco reported a free cash flow of $21.99 billion in Q3 2024, suggesting that the world’s largest oil producer may have been pushed into a net debt position for the first time in two years.
– Even though Saudi Aramco’s net income fell by 15% year-over-year to $27.6 billion, the state oil firm kept its $31 billion dividends intact as Riyadh uses hard-earned oil income to finance its ambitious diversification drive.
– Speculation is rife that OPEC+ could extend its current production targets into 2025, with Saudi Arabia continuing to produce 9 million b/d, despite a $10 per barrel drop in oil prices from a year ago.
Saudi Arabia was one of the largest issuers of international debt this year, with its Public Investment fund issuing some $50 billion in 2024 to date, with Aramco selling some $9 billion in bonds, too.
2. Trump Re-Election Puts US-Canada Ties Under the Spotlight
– Canada is bracing for tough negotiations with the United States, despite being the largest importer of US goods globally, as President-elect Trump readies to implement his ambitious tariff plan.
– If the US does slap a 60% tariff on Chinese goods as promised and this triggers an escalatory spiral in retaliatory tariffs, too, Mexico and Canada would suffer the most with their GDP.