Donald Trump has been doing his best to wage war on the rising oil price, but the president is struggling with the fact that strong US growth is a natural boost to crude.
However, there is another thorn in his side – Saudi Arabia-led OPEC, who have been keen to limit supply. Given that state-owned Aramco is gradually opening to global investors, it seems unlikely that Mohammed Bin Salman and Khalid Al-Falih will want to let oil production off the leash anytime soon.
Saudi Arabia’s Aramco Triumphs in Blockbuster Bond Offering
The US might be the world’s biggest individual producer, but Saudi Arabia still casts a large shadow over the bulk of the crude supply. Aramco’s recent bond sale is part of the crown prince’s efforts to gradually open up the Saudi economy. It was a tremendous success, raising around $60 billion.
Due to the need for an audit to raise debt, Aramco is now officially the world’s most profitable company. The rabid demand for the bond could spur Saudi Arabia to accelerate its plans for the long-awaited Aramco IPO.
While Aramco is slowly prepping for that IPO, the oil price surge couldn’t be better for the Saudis – or worse for Trump.
President Trump would love for oil prices to fall to help support his agricultural voter base and juice the economy with additional economic stimulus. However, Aramco has no incentive to open the taps. Analysts rave about the raging success of the bond sale with oil above $60 a barrel. Imagine how much money Aramco would be worth in an IPO if crude prices continued to rise from here.