Aramco's $2 Trillion Dream Fades as Oil Prices Weigh on Investor Returns

Aramco's stock has fallen to its lowest in five years, with a return rate of only 16% since its listing in 2019. The Saudi state oil company's poor performance is attributed to low oil prices, driven by forecasts of weakening demand and China's subsiding oil thirst. Aramco's majority shareholders, led by Crown Prince Mohammed, had ambitious spending plans to diversify the Saudi economy, but a $2 trillion valuation target is now unattainable due to oil price fluctuations.

Aramco's stock has fallen to its lowest level in five years, with a return rate of only 16% since its listing in 2019. The Saudi state oil company's poor performance can be attributed to low oil prices, driven by forecasts of weakening demand and China's subsiding oil thirst [1]. Aramco's majority shareholders, led by Crown Prince Mohammed, had ambitious spending plans to diversify the Saudi economy, but a $2 trillion valuation target is now unattainable due to oil price fluctuations [1].

Oil prices have seen significant volatility in recent years, with the global market reflecting on the upcoming peace talks between Russia, Ukraine, and the U.S. aimed at resolving the conflict in Ukraine. The potential lifting of sanctions on Russian crude has weighed on market sentiment, causing crude prices to drop [2]. The International Energy Agency (IEA) reports that global oil supply is expected to increase by 2.5 million barrels per day in 2025, while demand growth forecasts were slightly lowered to 680,000 bpd, highlighting an increasingly oversupplied market [2].

Meanwhile, Saudi Arabia's Vision 2030 is transforming real estate finance into a core driver of non-oil economic growth through policy innovation and public-private partnerships. Corporate real estate loans surged 27.5% to SR223.4 billion in Q1 2025, reflecting strategic bank focus on giga-projects like NEOM and the Red Sea Project [3]. The Public Investment Fund (PIF) leads reforms, including mortgage securitization and housing targets, while attracting foreign investors through streamlined regulations. High-conviction opportunities include infrastructure sukuk, PIF-backed developers, and local content providers, though risks persist around governance opacity and project execution [3].

Aramco's CEO, Amin Nasser, stated that the company remains committed to meeting customer demand over the short and long term. However, in the short term, the Saudi government may have to revise its spending plans due to the current economic conditions [1]. The Saudi economy is diversifying, with non-oil GDP contributing 39% to the country’s GDP in 2024, but the big-ticket diversification projects have become a drain on Aramco [1].

References:
[1] https://oilprice.com/Energy/Energy-General/Aramcos-2-Trillion-Dream-Turns-Into-Investor-Letdown.html
[2] https://economymiddleeast.com/news/crude-oil-prices-drop-to-66-20-amid-upcoming-peace-talks-between-russia-and-ukraine/
[3] https://www.ainvest.com/news/saudi-vision-2030-real-estate-revolution-credit-institutional-reforms-fueling-oil-growth-investment-opportunities-2508/