Exactly 87 years ago, Saudi Arabia witnessed a historic breakthrough when an American-owned oil well in Dhahran struck a massive petroleum reserve on March 3, 1938.
The discovery marked the beginning of the transformation of Saudi Arabia into one of the largest oil producers and exporters in the world.
It later reshaped the country’s economy, infrastructure, and global influence.
Impact of oil discovery on Saudi Arabia
Before oil was found, the country had a primarily nomadic population. Its economy relied heavily on pilgrimage tourism to Makkah.
The oil discovery led to rapid modernization. It paved the way for infrastructure development that includes pipelines, refineries and ports.
Today, oil revenue accounts for huge budget of Saudi Arabia. It solidified the country’s status as a global energy powerhouse.
Role in global oil market
Saudi Arabia plays a critical role in the global energy sector as it is one of the leading oil exporters in the world.
Its petroleum trade has strengthened diplomatic relations with Western nations and major economies in Asia.
The oil boom also attracted millions of foreign workers from countries including the US, India, Pakistan, and Ethiopia.
OPEC member
In 1960, Saudi Arabia and four other nations formed the Organization of the Petroleum Exporting Countries (OPEC) in Baghdad, Iraq.
Its aim is to enable cooperation of leading oil-producing and oil-dependent countries.
The organisation was later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975), Angola (2007), Equatorial Guinea (2017) and Congo (2018).
Although, world is exploring renewable energy options, most of the nations are still heavily dependent of crude oil.
