Saudi Aramco cuts spending this year – the first sign that the oil price war the kingdom has started is hitting its home market. Capital expenditures will be between 25 billion USD and 30 billion USD in 2020, and next year’s plans are revised, said the Saudi oil giant. The oil giant shrinks the range of 35 billion USD to 40 billion USD previously announced in its prospectus for its initial public offering, and down from 32.8 billion USD for 2019.

“We have already taken steps to streamline our planned capital expenditures for 2020”, said the Chief Executive Officer Amin Nasser. Taking into account the impact of the pandemic on economic growth and demand, Aramco adopts a “flexible approach to capital allocation”, he added.

The price war in the oil market, led by Saudi Arabia and Russia, threatens the company with more problems as producer countries prepare to increase supplies. Lower prices, driven by weak demand and the fact that the commodity has lost nearly half its value since the beginning of the year, threaten to further affect revenue.

Saudi Aramco’s stock fell last week, expanding its decline to 18% year-to-date. The company’s market capitalization has shrunk from its peak of 2 trillion USD in December to about 1.5 trillion USD now.

The impact of the coronavirus on the oil market has eroded OPEC’s initial optimism for demand this year, with analysts predicting a drop in consumption.

In its 2019 financial statement, Saudi Aramco stated that its net profit reached 330.7 billion riyals (88 billion USD) compared to 416.5 billion riyals a year earlier. Revenues shrunk to 1.11 trillion riyals, against 1.19 trillion riyals in the previous year. Operating profit fell to 674.9 billion riyals from 798.4 billion riyals for 2018.