Evelyn Lara-Mason
Week 2 Milestone: Saudi Aramco
Saudi Aramco, first known in 1933 as the California Arabian Standard Oil Company (CASOC) is a company who has developed and transformed over time from the position of a subsidiary to the Standard Oil Company of California Company to a 100 percent owned Saudi Aramco in Saudi Arabia, since 1980 (Our history, 2022, Ch 1). Their power today with oil is due to their great determination to embark in a direction that has forever changed the economic status of Saudi Arabia. Aramco’s advantage comes from looking to a future of being more than just a barrel producing and selling entity. Saudi Aramco’s ability to diversify through investing and technological advancements has allowed them to be the supplier, owner, and investor in new innovations of energy that keep them ahead of the game (Our history, 2022) (Crude oil, 2022).
The increasing demand for Saudi Aramco to produce oil comes after losing Russia in the market of exporting oil. (Bove, 2022) While Saudi Aramco is being used to utilize and take on the weight for exporting oil for much of the oil market, the prices of a barrel of crude oil increased by huge rates (Aramco Announces, 2022). Since 2019 the Real Gross Domestic Product went from 1% to 2.4 in 2022 and is expected to grow to 2.7 % by 2024 (Country Forecast, 2022).
In this I can’t help but to consider the reference of Revelation 6:6, states, “And I heard something like a voice in the midst of the four living creatures saying, “A quart of wheat for a denarius (a day’s wages), and three quarts of barley for a denarius; and do not damage the oil and the wine.” (Amplified Bible). In great times as these, the rise of oil and inflation indeed has me wondering if this is a sign where price for food amounts to money made from wages. leaving many without.
References
Aramco announces first quarter 2022 results. (2022) Aramco. Dhahran https://www.aramco.com/en/news-media/news/2022/aramco-announces-first-quarter-2022-results#:~:text=The%20Saudi%20Arabian%20Oil%20Company,Initial%20Public%20Offering%20in%202019
Bove, T. (2022, March 21) The world’s biggest oil company just doubled its profits, and now it’s planning to produce even more. Fortune. https://fortune.com/2022/03/21/saudi-aramco-2021-profits-oil-production/
Crude oil (2022) Trading economics. Stats. https://tradingeconomics.com/commodity/crude-oil
Our history: Driven by the curiosity to explore. Chapter 1, The birth of Arabian Oil (2022) Aramco. https://www.aramco.com/en/who-we-are/overview/our-history#
Hey there, Evelyn
Thank you for your post. It is sure interesting to see the correlation with inflation, war in the eastern Europe, the increase of international and national travel to the increase of the profits for these oil companies. I recently had a conversation with a stock investor, he said "oil companies are the most profitable companies at this current time." The question becomes, is it benefiting the US or is it harming it? In CA, citizens were paying an average of $6.10 per gallon. I would say that even though these companies are doing well, it is not for the benefit of most.
It is true that good business is close to good politics. The United States and Saudi Arabia have shared common political and business ideas over the past seventy years because of mutual respect and common interest, according to the U.S. Embassy & Consultant’s in Saudi Arabia (2022). Like Saudi Aramco, Dow Inc, the world’s third largest plastics producer, has enjoyed many years of business relations with Saudi Arabia. Dow has had tremendous business and economic success due to their relations with Saudi Arabia since 1976, and Dow is known as the largest investor in Saudi Arabia in regard to petrochemical investments (Dow, 2022). Oil may seem controversial considering many “green” movements to reduce the differing countries’ carbon footprints and how these emissions have an effect on our environment and on our future, however, it is part of mankind’s duty to use the earth and its resources. Genesis 1:26 states "Then God said, 'Let us make man in our image, in our likeness, and let them rule over the fish of the sea and the birds of the air, over the livestock, over all the earth, and over all the creatures that move along the ground”’ (English Standard Version). Even after thier good business and good politics, it will be beneficial for both countries if trade between petrochemical realms continue between the United States and Saudi Arabia.
Resources:
Dow Inc. (2022). Dow in Saudi Arabia. https://sa.dow.com/en-us.html
U.S. Embassy & Consultant’s in Saudi Arabia. (2022). Our Relationship. https://sa.usembassy.gov/our-relationship/#:~:text=For%20over%20seventy%20years%2C%20the,mutual%20respect%20and%20common%20interests.
If the cliché' luck favors the prepared mind' is anything to go by, great financial opportunities only favor the established players in a certain field. This is true for Saudi Aramco, which has always leveraged the provisions of the modern technological advancements which harbor the promise of transforming supply chains to augment sustainability and efficiency levels while remaining ahead of the curve in innovation matters (Lin, 2014). Additionally, the recent sanction move which has blocked Russia from oil trading partnerships has presented a great opportunity to the company, which is now able to supply at higher prices with greater demand, increasing the revenue. Through this twist of fate, the company has been able to deploy the well-established and longstanding technology in filling global oil demand, thus reaping gigantic amounts of revenue in the process. Therefore, applying the suitable infrastructure is core to tapping the unfolding opportunities.
Leković, M. (2018). Investment diversification as a strategy for reducing investment risk. Ekonomski horizonti, 20(2), 173-187. https://scindeks.ceon.rs/article.aspx?artid=1450-863X1802173L