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Saudi Aramco is the world's biggest oil company, pumping crude oil out of the Saudi desert and selling it to the world.
Saudi Aramco is the world's largest oil company. It owns the oil under Saudi Arabia — a staggering share of the planet's proven reserves — and its main job is simple: pull crude oil out of the ground and sell it to refineries and customers around the world. It also runs huge refineries and chemical plants that turn that oil into fuel, plastics, and other products. Most of its money still comes from selling crude oil, with refining and chemicals making up the rest.
What makes Aramco unusual is how cheaply it can produce oil. Its wells sit on enormous reserves and the oil flows out at some of the lowest cost per barrel in the industry, meaning even when prices fall it can still make money while others struggle. The Saudi government owns almost all of the company, so it functions as a kind of national cash machine: the country's budget depends heavily on the oil money Aramco pays out as dividends. That relationship cuts both ways — Aramco's fortunes are the kingdom's fortunes, and vice versa. The company listed a small slice of shares on the Saudi stock exchange in 2019, raising tens of billions of dollars in what became the biggest IPO in history. It has since paid out enormous dividends to shareholders, including the government, and uses its free cash flow to fund those payouts while also investing in new projects. It has been pushing into chemicals through its stake in SABIC, and it is investing in natural gas and, cautiously, in lower-carbon projects.
In 1933, Saudi Arabia signed a concession agreement with Standard Oil Company of California, giving the American company the right to look for oil in the Saudi desert. A subsidiary called the California Arabian Standard Oil Company was created to run the deal, and drilling began two years later after surveys of the land.
For years the drilling turned up nothing, and by 1937 the company's chief geologist Max Steineke was telling executives to keep going. It paid off in 1938, when commercial oil finally flowed from a well called Dammam No. 7, the Prosperity Well. That single well laid the foundation for both the company's future and the country's.
In 1944 the company renamed itself the Arabian American Oil Company, which is where the short name Aramco came from. It kept that name for decades, until a royal order in 1988 changed it to the Saudi Arabian Oil Company, or Saudi Aramco.
In 1950 the company finished the Trans-Arabian Pipeline, a 1,212-kilometer line that was the longest in the world at the time. It carried oil from eastern Saudi Arabia all the way to the Mediterranean Sea, which sharply cut the time and cost of getting oil to Europe.
After two years of exploring the shallow waters of the Arabian Gulf, the company found the Safaniyah field in 1951. It was the largest offshore oil field the world had discovered so far.
By 1980 the Saudi government had raised its stake in Aramco to 100 percent, so the company was now fully owned by the country. Eight years later, Saudi Aramco was officially established to take over all of Aramco's responsibilities, and Ali I. Al-Naimi became its first Saudi President and CEO.
In 1989 Saudi Aramco began to shift from simply producing and exporting oil to running the whole chain, including refining and selling. It formed a joint venture with Texaco in the United States called Star Enterprises, which grew into Motiva, and in 2017 it became sole owner of North America's largest single-site crude oil refinery at Port Arthur, Texas.
In 2019 Saudi Aramco became a public joint-stock company, selling shares on the Saudi Exchange for the first time. The offering was about 3.45 billion shares, roughly 1.73 percent of the company, making it the world's largest IPO. Still, the $2 trillion valuation it had hoped for was not reached, and foreign investors bought in only in limited numbers.
In 2020 Saudi Aramco bought a 70 percent stake in the Saudi Basic Industries Corporation, or SABIC, for about SAR259.1 billion (USD69.1 billion). The deal turned Aramco into one of the major players in global petrochemicals.
In 2026, repeated Houthi strikes hit Aramco infrastructure, including the Ras Tanura refinery, its Dhahran administrative building, the Shedgum gas plant and the Tanajib oil facility. With regional conflicts putting crude exports at risk, Aramco lined up a USD 10 billion revolving credit facility to strengthen its finances. It is also working on extra export routes and overseas storage, including a plan to store crude in Singapore's Jurong Rock Caverns from the second half of 2027.
The big risk is the obvious one: the world is trying to use less oil, and Aramco's entire business rests on the world continuing to want it. For now, demand remains strong, and its low costs give it staying power. But the company's future depends on how fast the energy transition happens — and on a government that treats it as the backbone of the national economy.
Saved answer · last researched 30 Oct 2026