Saudi Arabia is broadening its energy strategy by maintaining its position as a major oil and gas producer while accelerating investment in renewable energy and preparing for the development of civilian nuclear power.
According to a report by Asharq Al-Awsat, the Kingdom’s energy sector is undergoing a major transformation as authorities seek to strengthen energy security, expand electricity generation and diversify the country’s energy mix.
From Oil Discovery to Global Energy Power
Saudi Arabia’s modern economic transformation can be traced to the discovery of commercially viable oil. Tests at Dammam Well No. 7 in March 1938 confirmed the potential for large-scale oil production. The well was later known as the “Well of Prosperity” and became a landmark in the Kingdom’s economic development.
Saudi Aramco’s transition to full state ownership was completed in 1980, while the Saudi Arabian Oil Company was formally established in 1988.
Today, the company remains central to Saudi Arabia’s energy strategy, while the Kingdom continues to develop additional infrastructure and energy sources.
Alternative Oil Export Routes Gain Importance
Disruptions to shipping through the Strait of Hormuz during the 2026 conflict involving the United States, Israel and Iran highlighted the importance of alternative routes for Saudi oil exports.
Asharq Al-Awsat, citing Reuters data, reported that Saudi oil exports through Yanbu on the Red Sea reached approximately 4.6 million barrels per day on April 2.
The increase was supported by the East-West Pipeline and Saudi Arabia’s oil storage and loading infrastructure. These facilities allow the Kingdom to move crude toward the Red Sea, reducing its dependence on routes through the Strait of Hormuz.
Saudi Aramco President and CEO Amin Nasser said in the company’s first-half 2026 report that long-term investment in pipelines, terminals and storage facilities had helped the company maintain production and exports despite disruptions affecting shipping through the Strait.
Aramco reported adjusted net income of $67.2 billion for the first half of 2026.
Saudi Arabia Accelerates Renewable Energy Development
Alongside its oil and gas investments, Saudi Arabia is expanding solar and wind power as part of its broader energy diversification plans.
In July 2025, the Kingdom announced power purchase agreements covering solar and wind projects with a combined capacity of 15 gigawatts. Investment in the projects is estimated at nearly $8.3 billion, with ACWA Power leading the consortium involved in their development.
The projects support Saudi Arabia’s objective of generating around half of its electricity from renewable sources by 2030.
The expansion of renewable energy is part of the Kingdom’s wider efforts to increase domestic electricity generation from alternative sources while continuing to develop its conventional energy sector.
Jafurah Gas Development Continues
Natural gas also remains an important part of Saudi Arabia’s energy plans. Aramco is continuing development of the Jafurah gas field, one of the Kingdom’s major unconventional gas projects.
The first phase is already producing sales gas and condensate, while the second phase is scheduled for completion in 2027.
The development is expected to strengthen domestic gas supplies and support Saudi Arabia’s broader plans for industrial growth and energy diversification.
Civilian Nuclear Power Enters a New Phase
Saudi Arabia is also preparing for the development of civilian nuclear energy.
On July 22, the US Department of Energy announced a peaceful nuclear cooperation agreement with Saudi Arabia under Section 123 of the US Atomic Energy Act. The agreement was signed by Saudi Energy Minister Prince Abdulaziz bin Salman and US Energy Secretary Chris Wright.
According to the US Department of Energy, the agreement establishes a legal framework for long-term civil nuclear cooperation between the two countries. The agreement is also subject to consideration by the US Congress.
The development of nuclear power would add another component to Saudi Arabia’s evolving energy mix, alongside oil, natural gas, solar and wind power.
A More Diversified Energy System
Saudi Arabia’s energy strategy is increasingly built around several sources rather than relying exclusively on crude oil. Oil and gas continue to underpin the Kingdom’s energy sector, while pipelines and storage infrastructure provide additional export flexibility.
At the same time, large-scale renewable projects, the development of the Jafurah gas field and preparations for civilian nuclear power are expanding the range of technologies available to meet future energy demand.
The combination of conventional energy resources with renewable and nuclear development reflects Saudi Arabia’s broader effort to build a more diversified and resilient energy system.
