In eastern Saudi Arabia, a strategic pivot is underway that could reshape the global energy landscape for decades to come. Saudi Aramco, the world’s most profitable oil company, long synonymous with crude, is steering a significant portion of its colossal resources toward a different fuel: natural gas.

This isn’t a tentative exploration but a full-throated strategic shift. The company has publicly raised its gas production growth target for 2030 to a staggering 80% above 2021 levels, a sharp increase from its previous goal of 60%. In an era of volatile oil prices and intense global pressure for an energy transition, Aramco is not retreating; it is repositioning, betting that gas will be the cornerstone of its future resilience and growth.

Navigating a shifting oil market

Aramco’s gas push reflects the company’s calculated long-game it continues to play in the oil sector. The kingdom, and by extension Aramco, operates from a position of unparalleled strength. As revealed by CEO Amin Nasser, the cost of producing a barrel of oil in Saudi Arabia is a mere $2, with associated gas coming in at just $1 per barrel of oil equivalent. This is the lowest cost base in the world, a fact that grants the kingdom immense strategic patience.

When oil prices dip, as they have in recent months, hovering around or below $70 a barrel, high-cost producers – particularly U.S. shale drillers – feel the pressure. Analysts note that profitability for many in the shale patch becomes difficult when prices remain under $70, as their drilling and completion costs rise. For Riyadh, a period of lower prices serves a dual purpose: it ensures continued global demand for oil while pressuring rivals and forcing cutbacks in investment that could lead to market share gains for low-cost producers like those in OPEC.

This strategy is backed by unwavering confidence in long-term oil demand. Saudi Energy Minister Prince Abdulaziz bin Salman has been a vocal critic of what he famously termed the “La La Land” scenario pushed by the International Energy Agency (IEA), which had predicted an imminent peak in oil demand. For years, he insisted that hydrocarbons were “here to stay” and that the IEA had transformed from a neutral analyst into a “political advocate.”

In a striking validation of this stance, the IEA recently made a dramatic turn. In its latest World Energy Outlook, the agency acknowledged that global demand for oil and gas could continue to grow until 2050, a direct retreat from its previous peak-demand predictions. OPEC welcomed this as a “rendezvous with reality.” This shift underscores the enduring role of fossil fuels and vindicates Saudi Arabia’s insistence on the need for continued investment in oil and gas supply.

Gas is no longer just a transition fuel

Against this backdrop of oil-market realism, Aramco’s aggressive move into gas is a masterstroke of diversification. But this is not just about finding a cleaner-burning alternative. Within the halls of Aramco’s headquarters in Dhahran, the narrative around gas has fundamentally evolved.

“Natural gas is no longer viewed merely as a transition fuel but has now become an essential and permanent part of the global energy landscape,” said Ashraf Al-Ghazzawi, Aramco’s Executive Vice President of Strategy & Corporate Development. This statement marks a significant rhetorical and strategic shift. Gas is now seen as a critical pillar in its own right.

The drivers for this are twofold. Firstly, there is a pressing domestic demand. For years, Saudi policy has aimed to use more natural gas for electricity generation and industry, freeing up millions of barrels of crude for export rather than burning them at home. This directly boosts national revenue.

Secondly, and perhaps more compelling, is the emergence of a powerful new source of global demand: the digital economy. “It is a key factor in supporting demand growth linked to artificial intelligence and data centers,” Al-Ghazzawi added. The explosive growth of energy-hungry AI data centers is creating a voracious and constant demand for reliable power, which gas is uniquely positioned to provide.

CEO Amin Nasser, in a recent CNBC interview, confirmed that gas is now receiving the lion’s share of the company’s capital investments. He revealed that Aramco is looking to establish its first lithium extraction plant by 2027, a move that ties into the ecosystem of new technologies and energy storage, but gas remains the central focus.

The Jafurah field

The engine of this gas transformation is the Jafurah field, the largest unconventional gas project in Saudi Arabia and one of the largest in the world. Jafurah is the cornerstone of the kingdom’s ambition to become a major global gas player. The increased production target of 80% is expected to lift Aramco’s total gas and liquids output to around six million barrels of oil equivalent per day.

Analysts at JPMorgan noted that this “represents a tangible increase of more than 500,000 barrels of oil equivalent per day compared to previous estimates,” signalling a clear acceleration in the company’s ambitions.

The financial rationale is also compelling. Aramco estimates that its gas expansion will add between $12 billion and $15 billion to its annual operating cash flow by the end of the decade. While gas may be less profitable on a per-unit basis than oil in the current market, it offers a stable and secure income stream. As Jamie Ingram, Managing Editor of Middle East Economic Survey, pointed out, gas represents a “guaranteed and stable source of income because its prices are fixed and the local market is continuously expanding.”

Gas and AI

Aramco’s strategy presents an interesting synergy: it is betting on gas to power the AI revolution, while simultaneously using AI to make its own operations more efficient. The company leverages over 10 billion data points daily and a 90-year historical record to analyze and optimize its performance. Nasser stated that these digital efforts have already yielded $6 billion in added value between 2023 and 2024.

This means that the same AI technology driving up global energy demand is also helping Aramco extract and deliver that energy more cheaply and efficiently, further cementing its low-cost advantage.

New energy reality

The convergence of these factors – Aramco’s gas pivot, the IEA’s revised outlook, and the unrelenting demand from both traditional industries and new technologies – paints a clear picture. The world is entering a more complex energy era than the simple “renewables-only” narrative suggested.

Saudi Arabia, through Aramco, is positioning itself as a master of this complexity. It is leveraging its low-cost oil as a strategic tool to maintain market dominance while simultaneously building a gas behemoth to secure its financial future and power the next wave of technological growth. The message from Dhahran is clear: the future of energy is not a choice between old and new, but a pragmatic, diversified portfolio where oil, gas, and technology are deeply intertwined. In this new reality, Aramco intends to remain the supplier of choice.

Vanessa Sevidova, post-graduate student at MGIMO University and researcher on the Middle East and Africa. Courtesy

https://journal-neo.su/2025/11/23/aramco-betting-big-on-a-new-energy-future/