Oil Giant Aramco’s Strong Stock Is a Mirage

SourceThe Wall Street Journal
SectorFinancial Markets
CountrySaudi Arabia

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 ...read more...