Benzinga | Mar 21, 2021 02:54PM EDT

Saudi Aramco Sees Profit Fall Nearly 45% On Lower Oil Demand

The world's largest oil exporter saw net income drop sharply last year, reflecting turmoil in oil markets amid the pandemic.

What Happened: Saudi Aramco on Sunday reported that its net income had fallen to 44.4% to $49 billion in 2020 as demand for oil was hit due to the COVID-19 pandemic, Reuters reports.

The company lowered its capital expenditure plans to $35 billion this year from $40 billion to $45 billion previously.

However, Bloomberg reported that Aramco plans to continue paying out a dividend of $75 billion despite the results. Most of the dividend money goes to the Saudia Arabian government.

See Related: Best Oil ETFs

Why It Matters: Aramco's average crude production fell to 9.2 million barrels a day during 2020. According to Aramco CEO Amin Nasser, there are signs of recovery in the market, and the demand for oil in Europe and the U.S. should increase with the deployment of COVID-19 vaccines.

Oil prices lost over a fifth of their value in 2020. Brent crude, the global benchmark, last traded at $64.53 a barrel on Friday compared with around $51 in December 2020.

The improving oil market is already benefitting oil and gas exploration and production stocks, and with them related ETFs such as the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP).