The Largest Economic Empire In The World Today...And No One Knows About It.

Summary

This video discusses the rise of Saudi Aramco, which quietly became the world's most valuable company by controlling global oil supplies. The story begins with Standard Oil's dominance during World War I, leading to Saudi oil discoveries in the 1930s. Saudi Aramco, once largely American-owned, became fully state-owned by 1976. Through major discoveries in the 1950s and the Gulf War, Aramco grew into a global oil giant, with vast influence over countries reliant on its oil. The video hints at a future technological breakthrough that could challenge Aramco's dominance in the energy sector.

Takeaways

• 💼 For most of the past two decades, the world's most valuable company was not Apple, Amazon, or Microsoft, but Saudi Aramco, an oil giant with immense influence.
• 🛢️ During World War I, Standard Oil, an American company, played a significant role in the Allies' victory by supplying much of the world’s oil, marking the beginning of oil's influence on global power.
• 🌍 In the 1920s, oil exploration in the Middle East began, initially with limited success, but discoveries eventually led to the formation of Saudi Aramco.
• 🏆 By the 1950s, Aramco found the world’s largest offshore and onshore oil fields, significantly boosting Saudi Arabia’s role in global oil supply.
• 🤝 In 1976, the Saudi government gained full control over Aramco, aiming to make it the largest oil company globally and cement Saudi Arabia's status in the energy sector.
• 📈 The Gulf War and subsequent demand from Asian countries like China, India, and Japan in the 1990s and 2000s bolstered Aramco’s production and dominance.
• 💰 In 2005, Aramco became the world's most valuable company, with a valuation of $781 billion, though it wasn't widely known in the West until it went public in 2019.
• 🌐 Countries like Japan, China, and even the United States rely on Saudi Aramco for oil due to logistical efficiency, despite being oil-rich themselves.
• 🔥 Aramco's immense influence allows it to control oil prices and impact global economies, as seen during the 2020 oil price war with Russia.
• 🔮 Despite the push for renewable energy, global demand for oil continues to grow, especially in developing regions, positioning Aramco as a continued leader in energy—unless new technologies shift the energy landscape in the future.

Q & A

What company held the title of the most valuable company in the world for most of the last two decades?

The company that held the title of the most valuable company in the world for most of the last two decades was Saudi Aramco, not companies like Apple, Amazon, or Microsoft.

How did Standard Oil influence World War I?

Standard Oil influenced World War I by supplying the Allies with oil, which was crucial for motorized transportation vehicles like tanks, ships, and trucks. The Allies controlled about 90% of the world's oil, while the Axis powers controlled only 3%, giving the Allies a significant advantage.

Who was Frank Holmes and what was his role in Middle Eastern oil exploration?

Frank Holmes was a New Zealand military engineer who, in 1922, began exploring the Middle East for potential oil deposits. After receiving approval from the king of Saudi Arabia and partnering with Standard Oil's branch, SOCAL, Holmes helped discover oil in Bahrain in 1932.

What were some of the major oil discoveries that helped Saudi Aramco become powerful?

In 1951, Saudi Aramco discovered the largest offshore oil field in the Persian Gulf, and in 1956, it discovered the world's largest onshore oil field, the Ghawar oil field. These discoveries significantly boosted Aramco's power and influence.

How did the Saudi Arabian government gain full control over Aramco?

The Saudi Arabian government gradually bought out American shares of Aramco, and by 1976, it gained 100% ownership of the company, making Aramco a fully state-owned enterprise.

How did Saudi Aramco benefit from the Gulf War?

During the Gulf War, Aramco was contracted by countries like the United States, UK, France, Egypt, and Kuwait to supply oil. This increased Aramco’s oil production by 50% overnight, further solidifying its position as a global oil giant.

Why did countries like Japan, China, and India become key customers of Saudi Aramco?

Japan, China, India, and other Asian nations became key customers of Saudi Aramco due to their growing economies and increasing oil demand. By 2005, Aramco became the largest oil supplier to these nations, further expanding its global influence.

Why do countries like the United States and Canada, which produce their own oil, still buy oil from Saudi Aramco?

Despite producing their own oil, the United States and Canada still buy oil from Saudi Aramco because it is often more efficient and cost-effective to import oil by sea from Saudi Arabia than to transport it domestically over long distances.

How does Saudi Aramco’s control of oil impact the global economy and energy supply?

Saudi Aramco’s control of a large portion of the world’s oil supply gives it disproportionate influence over global energy markets. Countries that depend on Saudi oil, like Japan, China, and India, are vulnerable to fluctuations in oil production and pricing dictated by Aramco.

What future energy technology is mentioned as a potential threat to Saudi Aramco's dominance?

The video hints at a new energy source, which was once considered science fiction, as a potential future technology that could challenge Saudi Aramco's dominance. However, details on this technology are reserved for a future discussion.