The transformation of Saudi Arabia from a poor desert kingdom whose economy was based on pilgrimage and primitive agriculture into one of the key players in the global economy is a direct result of the discovery and exploitation of its colossal oil reserves. However, the path to wealth was determined not only by the presence of resources but also by complex geopolitics, strategic control over their extraction, and a far-sighted, albeit contradictory, policy of the ruling dynasty.

The Discovery of "Black Gold": A Deal with the West

Until the 1930s, the economy of Saudi Arabia was extremely limited, and its state budget depended on revenues from the pilgrimage of Muslims to the sacred cities of Mecca and Medina. A turning point came in 1933 when King Abdulaziz ibn Saud, in need of money, granted an oil exploration concession to the American company Standard Oil of California (SOCAL). After several years of fruitless searches, on March 3, 1938, oil of commercial quality was discovered at well No. 7 in Dharan. This discovery forever changed the fate of the region. In 1944, the American company was transformed into Arabian American Oil Company (Aramco), which for decades became the main operator of oil production in the kingdom.

The Era of Nationalization and the Acquisition of Sovereign Control

The first decades saw most of the profits from oil sales go to Western shareholders of Aramco. However, with the growing global demand for energy resources and the strengthening of the Saudi state, the Saudi leadership began to fight for an increase in its share. The key process was the gradual nationalization of Aramco's assets. Starting with a 25% stake in 1973, Saudi Arabia acquired 100% of the company's shares by 1980, gaining full sovereignty over its natural resources. This step coincided with the oil embargo of 1973, when Arab oil-exporting countries imposed restrictions on supplies to support Egypt and Syria in their war with Israel. Oil prices quadrupled, and Saudi Arabia's revenues surged, transforming it from a regional player into a global financial giant.

Oil as an Instrument of Internal and External Policy

The huge revenues allowed the ruling Al Saud dynasty to implement large-scale transformations within the country. A model of a welfare state was created, providing free education and healthcare, housing and utility subsidies, and no income tax for citizens. This contributed to social stability and the legitimation of the monarchy's power. On the international stage, Saudi Arabia, becoming an informal leader of OPEC, began to use oil as an instrument of geopolitical influence. The Tadawul stock exchange, the creation of sovereign wealth funds such as the Public Investment Fund, and massive investments in foreign assets solidified the kingdom's status as a financial power.

The Problem of Resource Dependence and a Look into the Future

Aware of the vulnerability of an economy based on a single exhaustible resource, the Saudi leadership initiated a "Vision 2030" strategy. This ambitious plan, promoted by Crown Prince Mohammed bin Salman, aims to diversify the economy, develop non-oil sectors such as tourism, finance, technology, and entertainment, and reduce dependence on oil revenues. The project of the futuristic megacity NEOM and the privatization of part of Saudi Aramco's assets are bright examples of this course. Thus, the history of Saudi Arabia's wealth is a path from complete dependence on foreign companies to sovereign control over resources, which today is transforming into a search for a new, post-carbon identity in the face of the global energy transition.
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