Saudi Arabian Oil Company

Sector: oil-gas

Estimated missed savings vs. renewable-transition baseline · 2022–2026

Saudi Arabian Oil Company could have saved $4.2B.

Here's the receipt.

We modelled what Saudi Aramco would have saved if it had undertaken a sustainability transformation — renewable energy procurement, supply chain diversification, and operational efficiency investments — before the 2022 Russian gas crisis and the 2026 Hormuz disruption. The net figure shows the difference between what Aramco actually paid and what a transformed company would have paid: stable renewable PPAs instead of crisis-era fossil generation costs, diversified inland refining instead of Hormuz-dependent shutdowns, and decentralised export routes instead of emergency rerouting. Aramco's $161B record 2022 profit came from the same crisis that exposed its structural vulnerability. All figures are annualised pre-tax estimates.

THE PRICE OF ACTING

Remediation cost
$8.9B
Net saving if acted
$3.3B net if acted
“Less than Aramco's $161B 2022 profit. They chose dividends over decarbonization.”

Based on 1-2% capex investment in efficiency measures per IEA 2024 benchmarks.

View line-by-line breakdown (4 items)

Line items

  • Renewable self-supply would have locked in stable energy costs for 60 TWh of internal consumption

    Saving$3.6B
    Sources:
    Assumptions:
    • Renewable PPA vs crisis-era fossil generation spread
      60 USD/MWh

      Scope: Line items 1

      2020-vintage solar/wind PPAs in the Gulf region locked in at ~$35/MWh (IRENA global average $42/MWh, Gulf solar even lower). Crisis-era gas-fired generation cost ~$95/MWh using 2022 peak gas prices. Spread of $60/MWh is conservative vs actual 2022 TTF-linked costs.

      [5]
    • Aramco internal electricity consumption
      60 TWh/yr

      Scope: Line items 1

      Estimated from IEA upstream energy intensity benchmarks applied to Aramco's ~13.4 Mboe/d production scale. Aramco does not publicly disclose this figure.

      Internal estimate: Aramco does not publicly disclose internal electricity consumption. Estimate derived from IEA upstream energy intensity benchmarks applied to Aramco's 13.4 Mboe/d production.

    Medium — Aramco uses ~60 TWh of electricity internally. A 2020-vintage renewable PPA at $35/MWh would have cost $2.1B/year. Instead, crisis-era fossil generation cost $5.7B. Difference: $3.6B saved.

  • Diversified downstream operations would have maintained throughput during Hormuz closure

    Saving$4.2B
    Sources:
    Assumptions:
    • Hormuz refinery shutdown lost throughput
      60 million bbl lost

      Scope: Line items 2

      Aramco shut refineries and declared force majeure during the Mar 2026 Hormuz closure. Estimated ~2M bbl/d lost throughput over ~30 days = 60M bbl at a blended $70/bbl crack-equivalent margin loss.

      [4]
    Medium — Aramco lost ~2M bbl/d of refinery throughput for 30+ days when Hormuz closed. At $70/bbl crack equivalent, that is $4.2B. Inland, renewable-powered refining capacity would have kept running through the blockade.

  • Decentralised supply chain would have avoided single-chokepoint shipping risk

    Saving$1.8B
    Sources:
    Assumptions:
    • Emergency crude rerouting cost premium
      6 USD/bbl premium

      Scope: Line items 3

      Rerouting crude via East-West pipeline to Yanbu and Red Sea ports adds $4-8/bbl in pipeline fees, storage, and tanker demurrage vs normal Hormuz routing. Applied to ~300M bbl of diverted volume over crisis period.

      Internal estimate: No public Aramco disclosure of rerouting costs. Estimate based on industry shipping and pipeline tariff benchmarks for Saudi East-West pipeline and Red Sea port capacity.

    Low — Aramco rerouted ~300M bbl via the East-West pipeline and Red Sea ports at a $6/bbl premium ($1.8B total). A diversified, decentralised supply chain with multiple export routes would have eliminated this single-chokepoint risk entirely.

  • Transition investment: renewable self-supply buildout for 60 TWh (the insurance premium)

    Cost$5.4B
    Sources:
    Assumptions:
    • Renewable self-supply capex (annualised)
      5400 USD million/yr

      Scope: Line items 4

      Building 60 TWh/yr of solar capacity in Saudi Arabia at ~$0.6M/MW installed, ~25% capacity factor, requires ~27 GW. At $600/kW installed cost amortised over 25 years plus O&M, annualised cost ~$5.4B. This is the cost that would have been incurred to avoid crisis exposure.

      [5]
    Medium

$4.2B

Medium

Bleeding

Foolishness score78

Show derivation
  1. Crisis exposure: zero renewable self-supply hedgeValue: 0.95Weight: 0.25[3]
  2. Hormuz supply chain concentration riskValue: 0.9Weight: 0.25[4]
  3. 2022 windfall dependency (profit = crisis rents)Value: 0.7Weight: 0.2[2]
  4. Refinery shutdown during Hormuz crisisValue: 0.8Weight: 0.15[4]
  5. Upstream emissions intensity offsetValue: 0.2Weight: 0.15[3]

Formula: Weighted sum of crisis-exposure factors: zero renewable self-supply hedge for ~60 TWh internal consumption, Hormuz chokepoint concentration, dependence on crisis-driven windfall profits, forced refinery shutdowns during 2026, and a partial offset for low upstream intensity (9.7 kg CO2e/boe). Higher = more foolish.

Weights version: v1.0

Deep dive: assumptions, methodology & revision history

Assumptions

  • Renewable PPA vs crisis-era fossil generation spread
    60 USD/MWh

    Scope: Line items 1

    2020-vintage solar/wind PPAs in the Gulf region locked in at ~$35/MWh (IRENA global average $42/MWh, Gulf solar even lower). Crisis-era gas-fired generation cost ~$95/MWh using 2022 peak gas prices. Spread of $60/MWh is conservative vs actual 2022 TTF-linked costs.

    [5]
  • Aramco internal electricity consumption
    60 TWh/yr

    Scope: Line items 1

    Estimated from IEA upstream energy intensity benchmarks applied to Aramco's ~13.4 Mboe/d production scale. Aramco does not publicly disclose this figure.

    Internal estimate: Aramco does not publicly disclose internal electricity consumption. Estimate derived from IEA upstream energy intensity benchmarks applied to Aramco's 13.4 Mboe/d production.

  • Hormuz refinery shutdown lost throughput
    60 million bbl lost

    Scope: Line items 2

    Aramco shut refineries and declared force majeure during the Mar 2026 Hormuz closure. Estimated ~2M bbl/d lost throughput over ~30 days = 60M bbl at a blended $70/bbl crack-equivalent margin loss.

    [4]
  • Emergency crude rerouting cost premium
    6 USD/bbl premium

    Scope: Line items 3

    Rerouting crude via East-West pipeline to Yanbu and Red Sea ports adds $4-8/bbl in pipeline fees, storage, and tanker demurrage vs normal Hormuz routing. Applied to ~300M bbl of diverted volume over crisis period.

    Internal estimate: No public Aramco disclosure of rerouting costs. Estimate based on industry shipping and pipeline tariff benchmarks for Saudi East-West pipeline and Red Sea port capacity.

  • Renewable self-supply capex (annualised)
    5400 USD million/yr

    Scope: Line items 4

    Building 60 TWh/yr of solar capacity in Saudi Arabia at ~$0.6M/MW installed, ~25% capacity factor, requires ~27 GW. At $600/kW installed cost amortised over 25 years plus O&M, annualised cost ~$5.4B. This is the cost that would have been incurred to avoid crisis exposure.

    [5]

Annual revenue

$445.7B

[1]

Methodology

We modelled what Saudi Aramco would have saved if it had undertaken a sustainability transformation — renewable energy procurement, supply chain diversification, and operational efficiency investments — before the 2022 Russian gas crisis and the 2026 Hormuz disruption. The net figure shows the difference between what Aramco actually paid and what a transformed company would have paid: stable renewable PPAs instead of crisis-era fossil generation costs, diversified inland refining instead of Hormuz-dependent shutdowns, and decentralised export routes instead of emergency rerouting. Aramco's $161B record 2022 profit came from the same crisis that exposed its structural vulnerability. All figures are annualised pre-tax estimates.

Revision history

  1. 1av

    Initial publication with researched data from Aramco FY2025 annual report, 2024 sustainability report, Carbon Tracker analysis, and IEA WEO 2024.

  2. 2av

    Reframed receipt around 2022 Russian gas crisis and 2026 Hormuz disruption. Replaced generic carbon pricing line items with crisis-specific energy procurement spikes, refinery shutdowns, and rerouting costs.

    • net_missed_savings.amount50000000004200000000

Edited by: av

Last reviewed:

Sources

  1. Aramco FY2025 Full-Year Results — Saudi Arabian Oil Company (accessed 12 Apr 2026)
  2. Aramco FY2022 Full-Year Results ($161B record profit) — Saudi Arabian Oil Company (accessed 12 Apr 2026)
  3. Aramco Sustainability Report 2024 — Saudi Arabian Oil Company (accessed 12 Apr 2026)
  4. EIA: Hormuz closure and related production outages (April 2026) — U.S. Energy Information Administration (accessed 12 Apr 2026)
  5. Renewable Power Generation Costs in 2024 — International Renewable Energy Agency (accessed 12 Apr 2026)