The Implications of Saudi Aramco’s IPO. Oil Market Disruption or Mirage?

13-Jan-2016

Introduction

The unexpected seems to be the norm in the Middle East’s unstable constellation in early 2016. Saudi Aramco, the world’s largest oil company and financial guarantor of the Kingdom, appears to be heading towards an Initial Public Offering, or IPO. leaving Oil and gas market owners, stakeholders, and analysts shocked by Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman recent pronouncements, stating that the Kingdom is considering sending it's national oil and gas company to the market.

The Aramco IPO

After that initial shock, which rattled stock-markets globally, the Aramco IPO could have some other hidden further shocks. If Aramco is partly going to the stock-market, the oil market will witness not only a power change and a new International National Oil Company (INOC or NOC) but also a possible redistribution of regional geopolitical and economic power at unknown levels of complexity.

To be sure, Saudi Arabia is sending shock waves around the region and the world with this new direction. Just days after the re-emergence of the Saudi-Iran conflict, due to the execution of 47 prisoners, including one leading Shi’a cleric, combined with Saudi Arabia and Iran’s heavy handed response to each other over the Sunni-Shiite confrontation, Saudi Aramco’s Chairman Khalid Al-Falih stated that Aramco would offer Aramco crude oil and gas reserves. (by Cyril Widdershoven, @riskparty63, MENA)

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