Saudi Aramco stock is considered one of the most prominent stocks in the Saudi and global trading market, due to the company’s position as one of the largest energy companies in the world in terms of market value and revenues. As oil prices continue to fluctuate and global shifts towards renewable energy, a fundamental question arises among investors: Is investing in Aramco stock feasible in the long term?
In this analysis, we will review the company’s financial performance, factors affecting the stock price, future challenges, and available opportunities, with the aim of providing an integrated vision that helps investors make an informed decision regarding their investment in this oil giant.
Saudi Aramco overview
Saudi Aramco, or Saudi Arabian Oil Company, is one of the world’s largest integrated energy and petrochemical companies. Founded in 1933 as a partnership between Saudi Arabia and Standard Oil of California, it grew into a national, wholly state-owned company by 1980.
Its position in the global market:
Aramco is the world’s largest exporter of crude oil, and controls one of the largest proven conventional oil reserves globally. It also plays a key role in stabilizing the global energy market thanks to its huge production capacity and advanced infrastructure.
Main achievements:
Implementation of the largest initial public offering (IPO) in history in 2019.
Developing renewable energy and energy efficiency projects within the framework of Saudi Vision 2030.
Investing in technologies to reduce carbon emissions and clean hydrogen.
Expanding into international markets through partnerships and refineries around the world.
How to buy Aramco shares online – In short:
Open an investment account with a brokerage company:
Local (such as: Al Rajhi Capital, AlAhli Capital).
Or global (eg: eToro, Interactive Brokers).
Submit the required documents:
ID or passport.
Bank account.
Fill out the “Know Your Customer” (KYC) form.
Transfer the amount to the trading account.
Search for Aramco stock code: 2222.
Click “Buy” and select the quantity, then execute the transaction
Summary of Aramco stock development since the public offering (IPO):
2019: Trading began at 35.2 riyals after the offering at 32 riyals.
2020: The stock fell to ~23 riyals due to the Corona crisis.
2021–2022: Gradual rise with oil prices, peaking at 42.5 riyals in May 2022.
2023–2025: Decline and stabilization between approximately SAR 30 and 38, with an additional offering in 2024.
1. Converting the stock price from riyals to dollars
Aramco shares are traded in riyals and converted to dollars using the exchange rate ($1 ≈ 3.75 riyals).
Example: The price of 30 riyals = approximately $8.
2. The importance of transfer for the foreign investor
It helps in evaluating the cost of investment and comparing it globally.
Returns are calculated in dollars after conversion, and are affected by the exchange rate.
Currency fluctuations may reduce profits or raise costs.
3. The effect of the dollar price on the investment decision
The stock price after conversion affects its attractiveness compared to international companies.
The investor incurs transfer fees and additional costs, which affects the net return.
A comprehensive financial analysis of Aramco stock performance
Financial performance indicators
1. Profitability – earnings per share (EPS):
Earnings per share for the past 12 months (TTM) are estimated at approximately 1.80 Saudi riyals.
Compared to the same period last year, there is a slight contraction (~‑2% YoY), reflecting the impact of lower oil prices.
2. Price to earnings ratio (P/E):
It currently ranges between 15 and 16 times, according to sources:
~15.06 (Yahoo)
~15.37 (GuruFocus)
~16.5 according to some other sites.
This ratio reflects a rather conservative assessment compared to the historical average (from 11 to 39), and is slightly higher than the industry average (~15).
3. Return on Investment (ROI)/Return on Capital (ROIC):
Aramco achieves high financial efficiency:
ROIC ≈22–24%
ROE ~25% and ROA ~21–23%
These percentages are significantly superior to most major oil companies such as ExxonMobil and Chevron
Major shareholders in Saudi Aramco:
The Saudi Government
It owns more than 90% of Aramco shares, making it the majority and controlling shareholder.
It plays a pivotal role in determining the company’s strategy and directing its policies, especially with regard to production, expansion, and prices.
Institutional Investors
After Aramco went public in 2019, some investment funds and major banks now own small percentages of shares (such as the Public Investment Fund, and Gulf and Asian funds).
Although their share is limited, they contribute to enhancing transparency and governance in accordance with the requirements of the Saudi Stock Exchange (Tadawul).
Financial and annual reports: What do they reveal to the investor?
The investor’s financial and annual reports reveal the true financial position of the company and provide a comprehensive overview of its performance during the year. The latest annual report highlights the following:
Earnings: The company posted a remarkable growth in net profits of XX% over the previous year, indicating operating efficiency and improved revenues.
Revenues: Revenues increased to XX million riyals, supported by increased sales and an expansion of the customer base.
Expenses: Operating expenses witnessed a slight increase due to the expansion of marketing activities and investment in infrastructure, but they remained under control.
Profitability: Improved gross profit margin, reflecting efficient cost management.
Future outlook for Aramco stock (2025–2030):
1. Global demand for oil:
Demand is expected to remain strong until 2030 despite the move towards renewable energy, especially from developing countries. This support enhances the stability of Aramco’s returns during the period.
2. Aramco transformation plans:
Aramco invests in refining, petrochemicals, and renewable energy, which enhances the diversification of income sources and reduces dependence on crude oil, which may increase the stock’s valuation in the future.
3. Geopolitical situations:
Volatility in the region (Middle East) may raise oil prices, which is in Aramco’s interest in the short term, but political stability is required to ensure long-term foreign investments
potential risks in long-term investment in Aramco:
- Oil price fluctuations: Profits are directly linked to global oil prices, which are affected by geopolitical and economic factors.
- Regulatory changes: Imposing new taxes or changes in government policies that may affect profitability.
- Environmental risks: Emissions commitments and international pressures for a clean energy transition may reduce demand for oil.
- Dependence on oil: Despite attempts to diversify, Aramco still relies heavily on oil as its main source of income.
- Geopolitical threats: Tensions in the region may affect production or exports.
- Currency Risk: Like its dollar earnings, exchange rate fluctuations may affect returns to local investors.
- Global competition: Increasing production from other sources, such as oil shale or renewable energies, may put pressure on market