Oil Giant Aramco’s Strong Stock Is a Mirage

Oil Giant Aramco’s Strong Stock Is a Mirage

A Saudi Aramco employee stands near pipes used for landing and unloading crude.





Photo:



Simon Dawson/Bloomberg NEWS



































































The best-performing big oil stock this year is one roundly rejected by global investors: Saudi Aramco. Most of the credit belongs to its shareholders rather than its management.



It has been one of the worst years for oil and gas producers in recent history: A price war, a pandemic-induced plunge in energy demand and a green shift that raises awkward questions about the sector's future profitability. Shares of the big U.S. oil producers are down almost a half in 2020 and their European peers about a quarter. That makes Saudi Aramco, whose stock is roughly flat, a star performer.



Management has done a reasonable job in the circumstances, but the real heroes are Aramco's patriotic local investors, who have held on to the shares they bought in last year's initial public offering. The