Fitch Ratings has affirmed Saudi Arabian Oil Company’s (Saudi Aramco) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘A+’, with Stable Outlooks.

Saudi Aramco’s Long-Term IDRs are constrained by those of Saudi Arabia (A+/Stable), its majority shareholder, given their close links. We assess Saudi Aramco’s Standalone Credit Profile (SCP) at ‘aa+’. The Short-Term IDR of ‘F1+’ is equalised with that of the sovereign.

Saudi Aramco is one of the largest global integrated oil producers and Saudi Arabia’s national oil company. Its financial profile benefits from strong pre-dividend free cash flow (FCF) generation and conservative financial policies. Its business profile is characterised by an exceptional scale of production, vast reserves, low production costs and downstream expansion. Its upstream operations focus on a single country and compared with oil and gas majors, its operations have a strong emphasis on crude oil production with rising natural gas output.

Key Rating Drivers

Exceptional Reserves: Saudi Aramco’s proved reserves were 250 billion barrels of oil equivalent (boe) at end-2024, which provides ample capacity to sustain government-directed production levels until the expiry of its concession in 2057 (and beyond upon renewal of the concession), by developing the most economically attractive areas. Its hydrocarbon production has one of the world’s lowest costs due to the geology in Saudi Arabia, favourable onshore and shallow water offshore environments in which the reservoirs are located and big economies of scale relevant to the use of infrastructure and the application of technology.

Integration in Focus: The company produced 12.4mmboe/d of total hydrocarbons in 2024, including 10.3mmbbl/d of liquids, with 53% of crude oil used by Saudi Aramco’s downstream operations, including refining and petrochemical complexes. Saudi Aramco operates the master gas system in Saudi Arabia, owns terminals and distribution hubs, retail fuel networks as well as shipping capacity with a global footprint. The company has set a target for 70% of procurement to be sourced locally and pursues a range of low-carbon initiatives. This reflects the ambition to maximise value from the hydrocarbon resources for the benefit of Saudi Arabia.

Conservative Balance Sheet: Saudi Aramco’s financial profile is very conservative, and we expect it will remain less leveraged than oil and gas majors Shell plc (AA-/Stable) and BP plc (A+/Stable). We forecast Fitch-defined EBITDA net leverage will remain in a range of 0.1x-0.4x between 2025 and 2028.

Ambitious Distribution Policy: The company paid progressive base dividends of USD84.6 billion plus USD0.9 billion performance-linked dividends in 2025. Under our oil price assumptions, we expect Saudi Aramco to incur some negative FCF after capex and sustainable and progressive base dividends (4% annual rise assumed by Fitch), with EBITDA net leverage rising from an estimated 0.1x at end-2025 to around 0.4x at end-2028.

Our forecast therefore does not include performance-linked dividends for 2026-2028. We assume Saudi Aramco is able to reconsider its capex profile or dividend policy, if oil prices fall below our midcycle price of USD60 per barrel for an extended period.

Market Fundamentals Moderating: Fitch has lowered its 2025-2027 oil price assumptions, reflecting moderating market fundamentals driven by significant oversupply. Production growth is expected to substantially exceed demand increases, with global supply expanding by 3.1 mmbpd in 2025 and 2.5 mmbpd in 2026 (based on International Energy Agency forecasts), led by non-OPEC+ producers and OPEC+. Meanwhile, we forecast demand growth at only 0.8 mmbpd in 2025 and 2026, constrained by slower economic growth, petrochemicals downturn and energy transition. EV adoption displaced 1.3 mmbpd in 2024, the pace of which may slow, but the trend will continue.

Sovereign Constrains Rating: Saudi Aramco’s rating is constrained by that of Saudi Arabia, in accordance with Fitch’s Government-Related Entities (GRE) Rating Criteria and Parent and Subsidiary Linkage Rating Criteria. This reflects the influence the state has over the company, for example, through regulating the level of production in line with OPEC+ guidance.

‘Very Strong’ Decision Making and Oversight: We assess decision making and oversight as ‘Very Strong’, due to the government’s influence on the strategic direction of the business, including the ability to determine Saudi Aramco’s maximum sustainable oil capacity. Saudi Aramco is 81.48% owned directly by the government of Saudi Arabia and 16% by the Public Investment Fund and its wholly owned subsidiaries.

‘Strong’ Precedents of Support: We expect state support to be forthcoming, although historically the company’s robust financial position has not necessitated government support. Saudi Arabia has provided support to other GREs in the past.

‘Very Strong’ Incentives to Support: We assess the preservation of government policy role factor as ‘Very Strong’ due to Saudi Aramco’s vital role in the Saudi Arabian economy as a main provider of feedstock to the country’s power generation fleet and other key end-markets. Fitch expects oil revenues to account for 54% of the government’s budget revenue in 2025. The ‘Very Strong’ contagion risk is due to the company’s status as a prominent issuer in international capital markets, serving as a proxy for the sovereign.

Peer Analysis

Saudi Aramco’s IDR of ‘A+’ is constrained by that of the sovereign. In 2024, its liquid and hydrocarbon production averaged 10.3mmbbl/d and 12.4mmboe/d, respectively, over 4x the upstream output of integrated producers such as Shell plc (AA-/Stable) and BP plc (A+/Stable).

The company’s far larger scale of operations, low-cost production and vast reserve base yield exceptional financial flexibility, with capex making up only 40% of operating cash flow (based on Fitch-adjusted 2024 actual and 2025-2027 forecast numbers), even though it is in a peak capex phase.

As a result, 60% of internally generated cash flow is available for distributions or additional discretionary expenditure, compared with 45% for Shell and 30% for BP. These characteristics, together with leverage in a range of 0.1x-0.4x, are reflected in the SCP of ‘aa+’ and also signify that Saudi Aramco has more capacity to operate profitably and adapt when oil prices are low.

Fitch’s Key Rating-Case Assumptions

Oil price of USD69/bbl in 2025, USD63/bbl in 2026 and 2027 and USD60/bbl in 2028

– Capex of USD53.5 billion in 2025, USD50 billion in 2026 and then reducing over time to USD40 billion by 2028
– Base dividends of USD84.6 billion and performance-linked dividends of USD0.9 billion in 2025; with the base dividend increasing by 4% each year over 2026-2028 and no performance-linked dividend amid lower oil prices

RATING SENSITIVITIES

– Negative rating action on Saudi Arabia would be reflected in Saudi Aramco’s Long-Term IDRs
– Weakening of the linkage between Saudi Aramco and the sovereign, which we believe is unlikely, coupled with a significant deterioration of Saudi Aramco’s SCP
– EBITDA net leverage rising to above 1x on a sustained basis due to, for example, sustained negative FCF driven by high capex, or large acquisitions, which may be negative for the SCP but not necessarily for the Long-Term IDRs
– Accelerated energy transition leading to lower global oil demand may be negative for the SCP but not necessarily for the Long-Term IDRs
– Deterioration of Saudi Aramco’s relative position to local peers, which we deem to be unlikely, could be negative for the company’s National Long-Term Rating

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

– Positive rating action on Saudi Arabia would be reflected on Saudi Aramco’s Long-Term IDRs
– An upward revision of the SCP is unlikely given the inherent volatility of the oil and gas industry and the company’s upstream production concentration in a single country

Liquidity and Debt Structure

Saudi Aramco’s Fitch-defined readily available cash and marketable securities at 3Q25 amounted to USD56.1 billion. Combined with full availability under its USD10 billion revolving credit facility (due in April 2029), this will be sufficient to cover short-term debt of USD9.2 billion and negative post-dividend FCF, if any.
Issuer Profile

Saudi Aramco is the national oil and gas company of Saudi Arabia.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.
Public Ratings with Credit Linkage to other ratings

Saudi Aramco’s ratings are constrained by the Saudi Arabian sovereign rating.

MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS

Click here to access Fitch’s latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in our credit analysis. Fitch’s macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.
ESG Considerations

The highest level of ESG credit relevance is a score of ‘3’, unless otherwise disclosed in this section. A score of ‘3’ means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch’s ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision.
Source: Fitch Ratings