Saudi Aramco announced on Tuesday that it will distribute a total of $31.05 billion in quarterly dividends, maintaining its position as the world's largest dividend-paying company, despite increasing signs that the company's profits are under pressure.

Due to concerns about demand, the outlook for oil has become gloomy, but dividend income is crucial to maintaining the Saudi government's finances. Early next year, a $43 billion annual special spending plan will begin to be reduced, which will test how long this spending can be sustained. Saudi Aramco's spending has exceeded its income, putting pressure on its balance sheet, with production close to its lowest level since 2021, and oil prices have fallen by 13% in the past four months.

Saudi Aramco's financial report released on Tuesday showed that third-quarter net income fell by 15% year-on-year to $27.6 billion, below market expectations; free cash flow (operating funds after deducting capital expenditures) was $21.99 billion, below the total dividend amount.

This spending is crucial for Saudi Arabia's budget as oil prices remain far below the level needed to balance the country's expenditure. Crown Prince Mohammed bin Salman is pushing forward with some costly projects, such as the future Neom project, but due to funding issues, some plans—including Saudi Aramco's own petrochemical plant—are being canceled.

The Saudi government directly holds over 81% of Saudi Aramco's shares, with its sovereign wealth fund holding an additional 16%.

As part of OPEC+'s efforts to revive the market, Saudi Arabia has kept its production at around 9 million barrels per day for over a year. The group recently further delayed plans to gradually lift production cuts, citing continued oil price fluctuations amid fragile economic prospects.