Saudi Aramco is the state-owned oil organization of the Kingdom of Saudi Arabia and a completely incorporated, worldwide petrol and synthetics undertaking.

Saudi Aramco has the world’s second largest proven conventional crude oil and condensate reserves of 261.1 billion barrels. The average daily crude production of Saudi Aramco is 10.2 million barrels per day.

History of Saudi Aramco

Saudi Aramco, also called Saudi Arabian Oil Company was formerly known as Arabian American Oil Company.

The events that led to the formation of Saudi Aramco were the oil shortages of W.W.1., the San Remo Petroleum Agreement of 1920 and the “Open Door Policy” of the U.S. government in 1921.

In 1933 the kingdom of Saudi Arabia conceded Standard Oil of California (SoCal) a concession. Other U.S. organizations joined after oil was found close to Dhahran in 1938. In 1950 Aramco opened a pipeline from Saudi Arabia to the Mediterranean Sea port of Sidon, Lebanon. In 1951 Aramco tracked down the principal seaward oil field in the Middle East.

During the 1970s and ’80s, control steadily passed to the Saudi Arabian government. A more effective pipeline, with an objective on the Persian Gulf, was done in 1981. The principal seaward oil field in the Middle East was shut in 1983 but to supply a refinery in Jordan. The kingdom ultimately took over Aramco and renamed it Saudi Aramco in 1988.

Why should you know about it?

In December 2019, Saudi Aramco reached a market capitalization of $2 trillion just days after its listing on the Saudi Stock Exchange becoming the world’s largest initial public offering.

Saudi Aramco is the most profitable company in the world, netted $88 billion in total profits as of 2020. Saudi Aramco has 79,000 employees.

The subsidiaries and affiliates of Saudi Aramco are located in countries like Saudi Arabia, the United Kingdom, India, China, the United States, Egypt, Japan and the Republic of Korea.

Saudi Aramco on Environmental Impact of the Internal Combustion Engine.

Saudi Aramco targets creation of 2 million electric vehicles a year by 2025. Aramco is exploring into innovation and motor plan that would diminish internal combustion engines’ carbon footprint and emanation of particulates and nitrogen oxides that cause air contamination.

How geo-political relations and tension can affect the world’s oil supply?

Tension between The Kingdom and U.S.A. might not be in mainstream news but it has been flaring since the start of the Yom Kippur War and the Gulf War. Last year Donald Trump reportedly told the crown prince Mohammad Bin Salman that “if Saudi Arabia didn’t immediately move to resolve the oil price war and drastically cut production – Washington would withdraw its military forces from the kingdom”.

If tensions escalate in an unexpected way then countries like the Russia and the China will reap benefits from it.

Saudi Arabia exported China 84.92 million tonnes, or about 1.69 million bpd, in 2020 as data from the General Administration of Chinese Customs showed.

“A state owned company with the power to bring the world to a standstill must choose wisely where its vested interests will lie in the time to come”.