Before oil became the cornerstone of the Saudi economy, Saudi Arabia's path to economic development was charted by the visionary King Abdul-Aziz. Before the discovery of oil, the founding of the kingdom as a unified nation under one banner, was strategic in establishing safety and peace. This was the foundation upon which Saudi Arabia began to leverage its holistic economic potential. From natural resources including gold and minerals, to location and proximity of trade routes, as well as the presence of the two most holy sites in Islam1Saudi Arabia and the Arabian Peninsula is very wealthy in history and culture. E.g. Some of the oldest human civilizations known to man were discovered here. But the focus of this article is modern oil Saudi Arabia..

In 1938, King Abdul-Aziz ordered to send two Saudis to study abroad in the United States. At the time, no modern schools or quality higher education were available in Saudi Arabia, nor was oil as significant of a commodity. H.E. Abdullah Al-Turaiki was one of the two sent to study abroad, twenty years later would become a pivotal figure in the realm of oil industry. Al-Turaiki established his reputation as the sole Arab oil expert in the 1950s, and emerged as a formidable opponent to big-oil when they made cuts to announced prices and violated their 50-50 profit sharing agreements with the government. He founded OPEC along with the Venezuelan Minster Juan Pablo Pérez Alfonzo. OPEC was strategic in re-shifting pricing power and in increasing government revenues. This also triggered a chain of other neighboring governments to renegotiate their royalty deals2See (AlSeef, 2011)..

Like many nations, Saudi Arabia significantly invests in education. Today, it ranks 12th globally in education expenditure as a percentage of GDP3According to the CIA World Factbook (Central Intelligence Agency, n.d.).. But back during the early days of oil discovery, it was only feasible to empower Saudis while making no compromise to the work output. Therefore, from humble beginnings in labor-intensive roles in Aramco which, at the time, was a joint venture between 4 American companies4SoCal (later Chevron) – 30%, Texas (later Texaco) – 30%, Jersey Standard (later Exxon) – 30%, and Socony-Vacuum (later Mobil) – 10%., the Saudi workforce progressively rose through the ranks, despite facing unfair treatment and challenging circumstances, embodying the spirit of perseverance and an unyielding drive towards self-reliance and the localization of the industry.

The 1970s marked a new chapter in Saudi Arabia's oil narrative. H.E. Ahmed Zaki Yamani led an effort to plan the “Participation Agreement”, where Saudi government acquired a 25% stake in Aramco in 19735(U.S. Department of State, Office of the Historian, n.d.).. This strategic move was more than a wise financial decision; it was a declaration of Saudi Arabia’s intent to harness its resources for the benefit of its nation. It was the result of meticulous negotiations, and years of market power building after the formation of OPEC to rival big-oil, all while taking advantage of the political climate of the time in the region. Many other oil nations were unsuccessful in foreseeing the importance of this step, others adopting a nationalization approach, which proved ineffective. It was Saudi leadership’s wisdom making a pivotal strategic decision.

King Faisal bin Abdul-Aziz’s decision to impose the famous oil embargo of 1973, not only stood with war efforts along-side neighboring Arabs in the war against Israel, but also proved to the world that Saudi Arabia will never shy away from its principles in the face of income. The embargo significantly and sustainability increased oil prices. Prices went from $2.9 to $11.7 (4X increase)6The first oil shock of 1973 (Federal Reserve History, n.d.).. This decision uncovered that oil is an impactive and strategic energy source. It was only after the mid-1970s when Saudi Arabia would be categorized as a wealthy nation driven by the substantial revenue increases for the relatively low population. By end of the 1970s, the participation framework had become the benchmark of the relation between big-oil and states, prompting similar demand by neighboring countries in the region and even beyond. Saudi Arabia has concluded the participation agreement earlier than initial timeline and exceeding the inital 51% acquisition agreement, by an additional 49%7Saudi Arabia acquired 60% stake by 1974. And gradually completed the acquisition by 1980. Therefore, the Saudi Arabian Government owned 100% of Aramco. Later to be renamed “Saudi Aramco” in 1988. Initial participation agreement framework was to acquire 51% in Aramco by 1983. Previous owners were compensated based on net book value.. Therefore, Saudi Arabia has completed the full purchase of Aramco in 1980.

The 1980s were a challenging time for OPEC and oil-dependent economies. Despite this, Saudi Arabia saw a surge of college-educated nationals returning from studies abroad, entering the workforce, and strengthening various industries, including the public sector. In 1983, H.E. Ali Al-Naimi became the first Saudi president of Aramco. He expanded the company's global reach, navigated turbulent oil markets, and empowered a generation of competent Saudi professionals, coining the term “Saudi technocrats”8See (Al-Naimi, 2016). Ali Al-Naimi who was proud of empowering competent and qualified Saudis, more information in his book. and fostering the qualification culture at Aramco.

In 1991, during the Gulf War, Saudi trainees at Aramco stepped up to replace frightened foreign employees who had returned to their home countries. Those trainees managed to ramp-up oil production and supply oil needs to the world during critical times9Adopted from Al-Naimi’s book (Al-Naimi, 2016).. Despite limited prior experience, those local trainees proved that home capabilities can be harnessed to achieve self-sufficiency.

At the present time, Aramco has proudly stood as a Saudi enterprise for over four decades10>85% for more than 20 years. With Saudization policies for vendors and service companies that do business with Saudi Aramco. See Iktiva, and Aramco.com for more details and information.. Since its full transition to Saudi leadership, Saudi Aramco has flourished into an enterprise whose operational magnitude and scale have grown enormously since the ‘50s. Production rate today reaches 12 million bbl/d, a substantial increase from the original output of under 1 million bbl/d. It has also expanded into the downstream business and petrochemicals. And went for IPO in 2019, with market cap of SAR 7.98T ($ 2.13T)11As of Dec 31, 2023 see ("Yahoo Finance," n.d.).. The strides made in technological and operational advancements, and global impact under Saudi leadership have established this company as a reliable energy provider for the world. Its evolution into a stalwart of reliability emphasizes Saudi Arabia's strong cultural values such as dependability and long-term horizon outlook.

Under the leadership of King Salman bin Abdul-Aziz, Saudi Arabia continues to advance as one of the world's top 20 economies. HRH Crown Prince Mohammed bin Salman has transformed Saudi Arabia into a more progressive and an ambitious nation. As evident in vision 2030 achievements.

Many countries got lucky with the discovery of natural resource reserves. But Saudi Arabia's rise as an energy leader was no luck. It’s a testament to decades of calculated decisions, investment in its people, and an unmatched determination to shape its own destiny. Saudi Arabia is home to devoted citizens, who put national interests above all else. The wisdom machine of Saudi leadership behind the decision chain is one that has been in the crafting for more than 300 years. This nation is worth understanding as Saudi Arabia continues to lead an ambitious future, not just in energy.

1. Saudi Arabia and the Arabian Peninsula is very wealthy in history and culture. E.g. Some of the oldest human civilizations known to man were discovered here. But the focus of this article is modern oil Saudi Arabia.
2. See (AlSeef, 2011).
3. According to the CIA World Factbook (Central Intelligence Agency, n.d.).
4. SoCal (later Chevron) – 30%, Texas (later Texaco) – 30%, Jersey Standard (later Exxon) – 30%, and Socony-Vacuum (later Mobil) – 10%.
5. (U.S. Department of State, Office of the Historian, n.d.).
6. The first oil shock of 1973 (Federal Reserve History, n.d.).
7. Saudi Arabia acquired 60% stake by 1974. And gradually completed the acquisition by 1980. Therefore, the Saudi Arabian Government owned 100% of Aramco. Later to be renamed “Saudi Aramco” in 1988. Initial participation agreement framework was to acquire 51% in Aramco by 1983. Previous owners were compensated based on net book value.
8. See (Al-Naimi, 2016). Ali Al-Naimi who was proud of empowering competent and qualified Saudis, more information in his book.
9. Adopted from Al-Naimi’s book (Al-Naimi, 2016).
10. >85% for more than 20 years. With Saudization policies for vendors and service companies that do business with Saudi Aramco. See Iktiva, and Aramco.com for more details and information.
11. As of Dec 31, 2023 see ("Yahoo Finance," n.d.).

1. U.S. Department of State, Office of the Historian. (n.d.). Foreign Relations of the United States, 1969–1976, Volume XXXVI, Energy Crisis, 1969–1974, Document 141. Retrieved April 26, 2024, from https://history.state.gov/historicaldocuments/frus1969-76v36/d141
2. Central Intelligence Agency. (n.d.). Education expenditures - The World Factbook. Retrieved April 26, 2024 from https://www.cia.gov/the-world-factbook/field/education-expenditures/country-comparison/
3. Al-Naimi, A. I. (2016). Out of the desert: My journey from nomadic Bedouin to the heart of global oil. Portfolio.
4. AlSeef, M. B. A. (2011). صخور النفط ورمال السياسة [Rocks of oil and sands of politics]. Jadawel Publishing, Translation and Distribution.
5. Vassiliou, M. S. (2009). The A to Z of the petroleum industry (Volume 116). Scarecrow Press.
6. Federal Reserve History. (n.d.). Oil shock of 1973–74. Retrieved April 26, 2024 from https://www.federalreservehistory.org/essays/oil-shock-of-1973-74
7. Yahoo Finance. (n.d.) 2222.SR key statistics. Retrieved May 4, 2024 from https://finance.yahoo.com/quote/2222.SR/key-statistics