Saudi Aramco Pushes for Lithium Investment, Eyeing Energy Transition

Saudi Aramco, the world’s leading crude oil exporter, is taking a bold step toward diversifying its investments by focusing on lithium production, a move that aligns with the Kingdom's broader strategy to reduce its dependency on oil. Sources close to the company revealed to the Financial Times that this push will capture part of the supply chain for lithium, a critical material for energy transition technologies such as electric vehicles (EVs).

This announcement comes as part of Saudi Arabia's broader Vision 2030 plan, spearheaded by Crown Prince Mohammed bin Salman, which aims to diversify the Kingdom's economy and reduce its reliance on oil revenue. The oil giant's entry into lithium production is a strategic move, positioning Saudi Aramco to become a significant player in the mining sector.

In September, Aramco announced a partnership with Saudi startup Lithium Infinity (Lihytech) to recover lithium from oilfield brine, utilizing the country’s vast oil reserves. This collaboration has already shown promising results, with successful extraction trials conducted at Aramco’s oilfields. Saudi Arabia aims to use the brine that comes out of these fields to feed into a commercial lithium extraction pilot, making this a groundbreaking development in both the mining and energy sectors.

This is not the only initiative related to electric vehicles in Saudi Arabia. The Kingdom's first EV brand, Ceer, was launched in 2022 in a joint venture between Saudi Arabia's sovereign wealth fund (PIF) and Foxconn. The company is set to build electric sedans and SUVs, marking a significant milestone in Saudi Arabia's transition to green energy technologies.

As part of its strategy, Saudi Aramco is not only focusing on lithium but also aiming to become a global hub for mining, tapping into the growing demand for raw materials needed to fuel the world’s transition to cleaner energy sources.

Meanwhile, global demand for oil continues to be strong, as outlined in OPEC’s latest report. OPEC forecasts that global oil demand will grow by 1.4 million barrels per day (mb/d) in 2025, with non-OECD countries leading the charge. On the supply side, OPEC expects a significant increase in production from countries like the United States, Brazil, and Canada.

With global oil demand expected to rise over the next few years, Saudi Arabia's diversification efforts into lithium production may not only help the Kingdom align with global sustainability trends but also position Aramco as a major player in the energy transition, strengthening its economic future.