This infusion is estimated to be worth nearly $80 billion. The move comes as the kingdom attempts to reform its energy-dependent economy.
The state-run Saudi Press Agency announced the announcement. This comes at a time when the oil company is valued at just below $2 trillion and oil trades above $90 per barrel -- its highest level since 2014.
According to state media reports, Saudi Crown Prince Mohammed bin Salman bin Salman was the assertive son and successor of King Salman. He made the decision that the stock should be transferred. It will be transferred to the Public Investment Fund of the Kingdom, the sovereign wealth fund. This has been Prince Mohammed’s vehicle to invest everything, from Uber to British soccer club Newcastle United. It is also part of Prince Mohammed's Neom project on the Red Sea Coast.
The report stated that "His Highness" added that the transfer is part of the kingdom’s long-term strategy to support the restructuring of the country's economy. It also stated that the kingdom will be creating jobs in the private sector.
Saudi Arabia has enjoyed the rise in oil prices following the coronavirus pandemic, which sent prices into negative territory. However, it is also concerned about climate change and the increasing global concern that fossil fuels are causing. Prince Mohammed's plans aim to make oil wealth pay for jobs that will allow the kingdom's youth, and to shift away from oil in the future.
The Public Investment Fund has also invested in Lucid Motors Inc., a California-based electric car manufacturer.
The fund didn't immediately address the question about its stock plans and did not respond to a request for comment. Last week, Moody's Investors Service, a rating agency, stated that the fund's assets had increased to $412 billion in 2020 from $152 billion in 2015.
With 94% of the company, the kingdom is still the largest shareholder. Saudi Arabian Oil Co. has been the main economic engine of the kingdom for many years and also the main source funds for the ruling Al Saud family.
Saudi Arabia offered a small amount of shares in the oil company on Riyadh’s Tadawul stock exchange in 2019. Aramco was listed on Riyadh's Tadawul stock market in 2019.
Aramco stock closed down slightly Sunday at 37.05 Saudi Riyals, or $9.87 per share.
