By: Donald V. Watkins
© Copyrighted and Published on December 22, 2019
Aramco, Saudi Arabia's state-owned oil company, has five times more oil reserves than ExxonMobil Corp., Chevron Corp., Royal Dutch Shell, Total, and BP combined. This makes Aramco a market-maker and impact player in the global oil industry.
Last week, Aramco became a publicly traded company on the Tadawul, Saudi Arabia's stock exchange. The Aramco IPO raised $25.6 billion for an oil giant valued at $1.7 trillion. The stock gained 10% in value on its first day of trading.
To put the Aramco valuation in perspective, Apple is currently America's largest publicly traded company. It is valued at $1.2 trillion.
Aramco earned $111 billion in 2018, nearly double Apple's profits. Additionally, Aramco's profits rise by $1.5 billion for every $1 rise in crude oil prices.
Because Aramco is a member of OPEC, the international oil cartel that controls global oil prices, the company is able to manipulate oil prices by increasing or cutting daily oil production to raise or lower oil prices worldwide.
Only the Wealthiest Americans Had Access to Aramco's IPO
Aramco's shares were priced at 32 Saudi riyals or $8.53 U.S. dollars per share, which was affordable for middle-class Americans.
Small Saudi investors were offered one bonus share for each ten shares they purchased and agreed to hold for six months.
Aramco decided in November that it would not list its IPO shares on a major U.S. stock exchange. This decision made it very difficult for the average American investor to buy the shares. However, the wealthiest Americans had access to the Aramco stock if they had at least $5 billion in assets and at least five years of investing experience.
One of the wealthy U.S. families that found a creative way to acquire the valuable Aramco stock is the family of President Donald J. Trump. The Trump family's stock was acquired through a Saudi company in which the family is a financial partner.
While Washington was consumed last week with the Congressional impeachment hearings involving the President's "quid pro quo" deal with Ukrainian President Volodymyr Zelensky last July, the Trump family and other "1 percenters" were busy enriching themselves by buying Aramco stock in the December 11, 2019 initial public offering.
Trump's protectionism of the Saudi Royal Family -- from the 2018 murder of Washington Post reporter Jamal Khashoggi to the murder of U.S. Naval personnel last week in Pensacola by a radicalized Saudi trainee -- extends far beyond traditional governmental alliances. The Trump family and Saudi Royal Family are making money together in real estate and infrastructure development deals the Saudi Kingdom is financing around the world.
As expected, a greedy and selfish Donald Trump did not insist that the Saudis allow average U.S. investors to participate in the Aramco IPO because his family had already been taken care of in the Aramco IPO. This is classic Donald Trump behavior -- promoting his self-interest above the national interest.
