How Aramco Became the Most Profitable Company on Earth?

Dear Readers

Pull up a chair and grab your favorite beverage because I’m about to tell you the most incredible business story you’ve ever heard. Picture this: a dusty desert meeting in 1933 that would eventually create the world’s most valuable company, worth more than Apple, Microsoft, and Google combined.

Sounds like a fairy tale? Well, buckle up, because the story of Saudi Aramco is wilder than any Netflix series you’ve binged lately.

Let’s break down:

• How Aramco started (spoiler: there were no billion-dollar seed rounds)
  
  

• Their wild journey to global dominance
  
  

• How they actually make money
  
  

• The insane revenue & profit numbers
  
  

• The challenges they face (and how they adapt)
  
  

• And most importantly — what you, the entrepreneur, should take from it
  
  

Chapter 1: When Americans Met Arabian Sand (And Found Liquid Gold)

Let me take you back to 1933. The world was in the Great Depression, people were broke, and Saudi Arabia was basically a collection of tribes trying to figure out how to make ends meet. King Abdulaziz was sitting on what he thought was just a whole lot of sand, wondering how to pay the bills.

Enter the Americans from Standard Oil Company of California (now Chevron). These guys were like, “Hey, we think there might be oil under all that sand. Mind if we take a look?”

And just like that, history was made. On May 29, 1933, they signed a concession agreement that would change everything. The California Arabian Standard Oil Company (CASOC) was born – think of it as Aramco’s great-grandfather.

Here’s where it gets interesting: those early American geologists literally packed their bags, said goodbye to California sunshine, and headed into the Arabian desert with nothing but hope and some fancy drilling equipment. Can you imagine the culture shock? From Hollywood to camels in one plane ride!

 Chapter 2: The “Eureka!” Moment That Shook the World

Now, here’s where the story gets juicy. For five long years, these guys drilled hole after hole, finding nothing but dry sand and probably a few very confused lizards. The investors back in California were getting nervous. Money was flowing out faster than water in the desert.

But then – BOOM! – March 3, 1938, changed everything.

Well No. 7 in Dammam finally struck oil. Not just a little trickle – we’re talking about black gold gushing out of the ground like something out of a movie. The Americans were dancing in the desert sand, and Saudi Arabia had just become the luckiest kingdom on Earth.

Fun fact: Dammam was just a tiny fishing village back then. Today? It’s a bustling metropolis that makes Dubai look like a startup. Talk about a glow-up!

Chapter 3: The Great Transformation – From Foreign Company to Saudi Crown Jewel

Here’s where the story gets really smart. The Saudis weren’t content to just sit back and collect checks while foreigners ran the show. Starting in the 1970s, they began what I call “The Great Takeover” – and it was brilliantly executed.

In 1972, Saudi Arabia bought 25% of the company. Two years later, they grabbed another 35%. By 1980, they owned the whole thing. It was like a perfectly planned business acquisition that took less than a decade.

The company was renamed Saudi Arabian Oil Company – Saudi Aramco for short. And here’s the kicker: they didn’t just kick out the foreign expertise. They were smart enough to keep the Americans around as consultants and partners while taking full control of their destiny.

Chapter 4: How Aramco Makes Money (Hint: The Old Way Still Works)

It’s simple — but extremely effective.

They extract oil. They sell oil. They make billions.

But let’s dig deeper:

1.  Upstream Operations (The Gold Mine)

This is the core of Aramco’s business:

• Finding oil
  
  

• Drilling it
  
  

• Bringing it to the surface
  
  

• Shipping it out
  
  

  Their oil is cheap to produce — often under $10 per barrel, while global oil sells for $70–90 per barrel. That margin? Insane.

2.  Downstream Operations

They don’t just sell crude. They refine it. They make petrochemicals, fuels, lubricants, plastics — value-added products that go into everything from packaging to power plants.

3.  Global Partnerships and JVs

Aramco has investments and partnerships in Asia, Europe, and the U.S. They invest in ports, refineries, and even green energy research. Strategic, long-term thinking.

Chapter 5: The Numbers That’ll Make You Blink

Brace yourself.

Here’s what Aramco pulled off in 2022 (their best year ever):

• Revenue: $604 billion
  
  

• Net profit: $161 billion
  
  

• Profit margin: Over 26%
  
  

• Production: ~10.5 million barrels of oil per day
  
  

• Employees: Around 70,000
  
  

• Market Cap (2023): Traded between $1.8 to $2.2 trillion

• Daily Production**: 10-12 million barrels per day (that’s enough to fill 640 Olympic swimming pools)
  
  

To put that in perspective:

• Aramco earns more per hour than some unicorns make in a year
  

• It’s bigger than Google + Amazon’s profits combined
  
  

Chapter 6: Challenges Faced (Even Giants Sweat)

Aramco is powerful, but it’s not invincible. Here’s what they deal with:

1.  Oil Price Volatility

Global oil prices move fast — based on war, politics, supply, demand, speculation. When prices drop, even Aramco feels the squeeze.

2.  Climate Pressure

As the world shifts toward renewables, Aramco faces growing scrutiny. ESG funds avoid it. Climate activists criticize it. And governments are pushing for greener alternatives.

3.  Geopolitical Risks

Located in the Middle East, Aramco has dealt with:

• Drone attacks
  
  

• Terror threats
  
  

• Cyberattacks
  
  

• International sanctions
  
  

In 2019, drones hit key oil sites and temporarily knocked out 5% of the world’s oil supply. That’s how critical Aramco is.

Chapter 7: The IPO That Shook the World

In 2019, Aramco went public — not globally, but on the Saudi stock exchange (Tadawul).

It was the largest IPO in history:

• Raised $25.6 billion
  
  

• Valued Aramco at $1.7 trillion
  
  

This gave the Saudi government both liquidity and global attention — and they still control 98% of the company.

Smart move? Absolutely.

Chapter 8: Entrepreneur Lessons from Aramco (Yes, There Are Plenty)