1936- Oil Found in Saudi Arabia
In 1936, Standard Oil of California discovered oil under the Saudi desert. The discovery of oil tranformed the Kingdom of Saudi Arabia into one of the richest nations on earth.
The discovery of oil has been a transformative milestone in the history of many countries worldwide. Its discovery under the Saudi desert by Standard Oil of California in 1936 catalyzed a major economic metamorphosis for the Kingdom of Saudi Arabia. The arid deserts, previously synonymous with bedouin life and a modest economy, gave way to an epoch of immense wealth, transforming Saudi Arabia into one of the wealthiest nations on the planet.
Before the pivotal discovery, the Kingdom was largely a rural state with an economy dependent on religious tourism, agriculture, and pearling. The discovery of oil fundamentally altered its socioeconomic landscape, catapulting it into global prominence. A historical and geographical lottery won, the black gold beneath its desert sands turned Saudi Arabia into an economic powerhouse.
The discovery was the beginning of an extensive relationship between Saudi Arabia and the United States. Standard Oil of California, later known as Chevron, established the Arabian American Oil Company (ARAMCO), which played a significant role in developing the Kingdom's oil industry. As oil production increased, it boosted the country's GDP exponentially, marking the start of its economic boom.
Oil transformed not just the economy of Saudi Arabia, but the whole societal framework as well. The petrodollars flowing into the country facilitated infrastructure development, improved education, and healthcare systems, significantly improving the standard of living. Cities such as Riyadh and Jeddah metamorphosed from humble settlements into gleaming urban metropolises. In a matter of a few decades, the nation transitioned from a Bedouin lifestyle to a modern, urban society.
The Kingdom's newfound wealth also amplified its global influence. Saudi Arabia joined OPEC in 1960, increasing its geopolitical leverage. As the world's largest exporter of petroleum, it gained significant influence over global energy prices. Hence, its political and economic decisions started having a wide-ranging impact on the global energy markets and geopolitical landscape.
However, the oil blessing also came with challenges. The Kingdom became heavily reliant on oil revenue, which constituted a significant portion of its GDP. This mono-economy status created vulnerabilities to global oil price fluctuations, which could lead to economic instability. As a result, Saudi Arabia has been making efforts towards economic diversification, notably through its Vision 2030 strategy.