As the world’s largest oil producer and the only Arab country in the G20, Saudi Arabia is a key geopolitical player on the global stage. Officially established in September 1932 the Kingdom has begun to pour its considerable financial resources into a series of large-scale economic development, diversification and modernisation initiatives in recent years. Saudi Arabia has attracted international attention for the momentum of its socio-economic transformation taking place under the auspices of the Vision 2030 development plan, and the scale of giga-projects being developed across the country in support of emerging economic sectors such as tourism, entertainment and green technology.


Saudi Arabia is the largest country in the Middle East, accounting for approximately 80% of the Arabian Peninsula, and the 13th-largest nation in the world. The Kingdom is covered by a series of interconnected deserts and scrubland, the largest of which is the 650,000-sq-km Rub Al Khali (Empty Quarter) in the south, which is the biggest continuous sand desert in the world. Saudi Arabia contains numerous wadis, or dry riverbeds, but no natural lakes, rivers or streams. According to the World Bank, less than 1% of the country’s total land area is considered well suited for agricultural activities. Saudi Arabia shares land borders with Jordan, Iraq and Kuwait in the north; Qatar and the UAE in the east; and Oman and Yemen in the south. It is also connected to Bahrain off its east coast by the King Fahd Causeway, a 25-km road bridge. The Kingdom’s west coast runs along the Red Sea.


Saudi Arabia is hot and extremely arid year round like much of the rest of the Gulf, and does not have clearly defined seasons. May to September are typically regarded as the summer months, during which temperatures can be as high as 45-55°C. The heat is felt the most in the interior, an area also characterised by low humidity. Temperatures cool in the winter months of November to February to an average of 19-25°C. Winter temperatures can drop below freezing in central and northern Saudi Arabia, especially at night, with occasional snowstorms in the north. During the seasonal transition period from February to May, violent sandstorms sometimes occur. Average annual precipitation is around 8 cm, almost all of which falls between December and March, when tropical winds can cause monsoons in the south and south-west.


The population was largely nomadic until the early 1960s, when rapid economic development fuelled by new oil revenue prompted a process of urbanisation, and by 2010 more than 95% of the country’s citizens were settled. The total population stood at about 35.8m in 2022, a 1.4% increase from 35.3m the previous year. This followed growth of 333% between 1975 and 2009, when the figure reached 25m, representing one of the fastest growth rates in the world. The World Bank forecasts the population to reach some 36.8m by 2023 and 39.3m by 2030. The Kingdom’s population density stood at about 16 people per sq km in 2020, though the figure is substantially higher in cities and urban areas. As of the middle of 2018, Riyadh Province, which is home to the capital and largest city, held 8.4m people, while Makkah Province, home to the second-largest city of Jeddah and the holy city of Makkah, held 8.8m people. The Eastern Province and its capital of Damman held over 5m people.


In 2018 the General Authority for Statistics estimated that Saudi nationals accounted for 62.2% of the population, with non-nationals making up the remaining 37.8%. The large foreign population comprises people from all over the world, including nationals from the Philippines, India, Pakistan, Afghanistan and Indonesia, among other Asian countries. The Kingdom is home to a substantial Western population as well, including residents from the UK, the US, the EU and Canada. The majority of the expatriate population lives in Riyadh and other major urban centres. The country is pursuing a policy of Saudiisation in many industries, whereby Saudi nationals fill a stipulated minimum proportion of the jobs in the sector. This could result in changes to the demographic make-up of foreign residents over time, as the Kingdom becomes less dependent on overseas workers in certain key professions.

The population is young, with an estimated 48% of nationals under the age of 25 as of mid-2020. The fifth census in the Kingdom’s history was taking place in 2022, instead of 2020 due to the Covid-19 pandemic, with the address canvassing phase having been completed by early March 2022.


The official language of the Kingdom is Arabic, of which there are two predominant dialects: Najdi and Hejazi. The large expatriate population means that a number of other languages are also spoken, including Urdu, Malay and Tagalog. English is widely spoken by Western expatriates and in places of business. Most road signs in the country are written in both Arabic and English.


As the birthplace of the Prophet Muhammad and the home of Makkah and Medina, Saudi Arabia is an Islamic country, with the king holding the title of Custodian of the Two Holy Mosques. The majority of Saudis are Sunni Muslim, while a minority – mostly living in the Eastern Province – are Shia. The Wahhabi ideology, a strict branch of Sunni Islam espoused by the 18th-century imam Muhammad ibn Abd Al Wahhab, has also played an important role in society since the first Saudi state was created.

Religion is central to social, political and economic life in Saudi Arabia, and under the Basic Law of Saudi Arabia, which was issued by King Fahd bin Abdulaziz Al Saud in 1992, the Quran serves as the basis for all the Kingdom’s laws, rules and regulations. Therefore, Islam informs and defines all areas of life, including the legal system, public behaviour, marriage relations, culture and the calendar. All Saudi nationals are required to abide by sharia law, which mandates daily public prayer, and the paying of zakat, or religious charity. However, enforcement of strict religious rules has eased somewhat in recent years, alongside efforts to empower women to play a more active role in the economy and broader society. Through the Hajj and Umrah pilgrimages, which are considered to be religious obligations and cornerstones of Islamic life, Saudi Arabia attracts around 19m pilgrims annually from around the world.


Despite the fact that the vast majority of the Arabian Peninsula is covered by inhospitable desert, nomadic tribes have called the area home for thousands of years. The earliest recorded archaeological evidence discovered on the peninsula dates back to the third millennium BCE, when the Dilmun civilisation occupied an area that includes the modern-day states of Bahrain, Qatar and Oman, as well as parts of Iran and Saudi Arabia’s Eastern Province. In the first millennium BCE, the ancient Thamud tribe moved from southern Arabia to what is now the Medina region, where they occupied a series of towns until the middle of the first millennium CE.

The history of the Arabian Peninsula from 600 CE onwards was largely characterised by the rise of Islam, which began with the birth of the Prophet Muhammad in Makkah around 570 CE. By the time of Prophet Muhammad’s death in 632 CE, the majority of the Gulf had been united under Islam. By 800 CE, as a result of rapid expansion by the early Muslim caliphs and other leaders, Islam had become the predominant religion over a wide geographical area, spanning from what is now Spain and Portugal in the west, to Central Asia in the east.

Early States

With political power concentrated in Damascus and Cairo during the medieval period, a handful of nomadic and semi-nomadic groups came to control the Arabian Peninsula. Among the most powerful of these groups were the Hashemites, or Banu Hashim, a clan within the larger Quraish tribe that is descended directly from Prophet Muhammad, who came to control much of the eastern Hejaz region of Arabia during the second millennium CE.

The Al Saud family, which today rules Saudi Arabia, has held intermittent control of the Nejd and other parts of central and eastern Arabia since the mid1700s. In 1744 Muhammad ibn Saud, then-head of the Al Saud family, established an alliance with the imam Al Wahhab to unify the Arabian Peninsula under the banner of Islam. The first Saudi state, which was based in Diriyah, controlled a large area until 1818, when the Ottomans recaptured it in the course of the Ottoman-Saudi war.

During the second Saudi state, which was formed in the wake of the war and based out of Riyadh, the Al Saud family ruled over a substantial area in central Arabia from the early 1820s until 1891, when it succumbed to tribal infighting. In the wake of this defeat, the then-head of the family, Abdul Rahman bin Faisal Al Saud, fled to Kuwait with members of his family, including his son Abdulaziz Al Saud. The latter is the founder of the third Saudi state, which is synonymous with modern-day Saudi Arabia.

New Beginning

In 1902, when he was about 26 years old, Abdulaziz Al Saud returned to Riyadh and conquered the city with a small group of men. Over the next few years the young ruler worked to consolidate his control over most of the Nejd region, where the Al Saud family remained popular among the local inhabitants. By 1912 Abdulaziz had gained control of most of central and eastern Arabia, and over the following two decades continued to expand his reach across the peninsula, negotiating with local rulers and colonial powers when possible, and resorting to force when necessary. In September 1932 Abdulaziz announced the formation of the Kingdom of Saudi Arabia, naming himself king.

Six years after the modern state was formed, US company Standard Oil discovered oil in commercial quantities in the Eastern Province city of Dammam. The find, which eventually revealed the second-largest reserves of crude oil in the world, changed the young country forever. By the mid-1950s oil exports accounted for the majority of the state’s income, and Saudi Arabia embarked on a series of large-scale, government-led economic development projects funded by this new revenue stream.


According to the IMF’s April 2022 “World Economic Outlook”, Saudi Arabia is categorised as an emerging market economy, a grouping that includes countries such as China, Turkey, Russia and India. The World Bank, for its part, classifies the Kingdom as a high-income, non-OECD country. According to the latest data from the World Bank, Saudi Arabia ranked as the 18th-largest economy in 2021, with GDP of $833.5bn. The Kingdom is a permanent member of the G20 and, under its first presidency in 2020, virtually hosted the G20 Leaders’ Summit in Riyadh.

Hydrocarbons income has traditionally accounted for the vast majority of state revenue; however, in 2016 the government launched Vision 2030, a bold economic diversification plan with the central aim of transitioning the economy away from oil. The plan envisages a multitude of developments, including greater localisation of sectors such as defence and value-added industrial production; an expansion of religious and other forms of tourism; and the privatisation of public services across transport, utilities, education and health.

In early 2019 Saudi Arabia redesigned the governance structure of Vision 2030, announcing the launch of the National Industrial Development and Logistics Programme (NIDLP) and bringing the number of Vision Realisation Programmes (VRPs) to 13. The NIDLP aims to guide growth in the industry, mining, energy and logistics sectors.

In early 2021 the second version of the Public Investment Fund (PIF) Programme was inaugurated, outlining a number of initiatives to be undertaken by Saudi Arabia’s sovereign wealth fund in the years leading to 2025. In line with Vision 2030, in its second edition the PIF will continue its endeavour to unfold new opportunities for non-oil GDP growth, generate more jobs, increase local content, empower a thriving private sector, improve quality of life and solidify the Kingdom’s regional and global leadership position in line with the VRPs.

In October 2021, in line with COP26 UN Conference on Climate Change and Vision 2030, the Kingdom announced a target of becoming a net-zero economy by 2060 and launched the Saudi Green Initiative (SGI), which represents the first wave of over 60 programmes and projects designed to contribute to the growth of the green economy. The SGI’s objectives include developing clean energy, offsetting emissions and protecting the environment. To establishing an investment fund for circular carbon economy solutions in markets in the region and the world, the Kingdom is targeting green investments of over SR700bn ($186.6bn) by 2030.


The government has worked to open up the Kingdom to foreign direct investment (FDI) in recent years. Its reputation for political stability has historically made it a popular destination for FDI in the MENA region. Following a decrease in levels during the prolonged oil price slump starting in 2016, FDI inflows rebounded in 2018.

In February 2021, in an effort to attract more FDI and promote domestic production, the Saudi government announced that it would exclude foreign companies having regional headquarters outside the Kingdom from public tenders from 2024. Known as the Programme HQ strategy (see Economy chapter), Saudi Arabia had already licensed 44 international companies to establish regional headquarters in the capital Riyadh as of October 2021 under the Kingdom’s push to become a regional commercial leader and compete more assertively for foreign capital and talent, as well as diversify the economy. The companies that have made the move are multinationals in sectors such as technology, food and beverage, consulting, and construction, including Unilever, Baker Hughes, Siemens, PepsiCo, Schlumberger, Deloitte, PwC and Bechtel, among others.

In March 2021 the Kingdom launched Shareek, meaning “partner” in Arabic, an investment programme that aims to facilitate FDI through government and private sector collaboration.

Figures from the Saudi Central Bank released in March 2022 showed that FDI reached $19.3bn in 2021 – its highest level in more than a decade, primarily aided by investment in the expansion of the pipeline network of Saudi Aramco.

At the end of 2021 the Kingdom also announced the launch of the National Investment Strategy (NIS), which is expected to generate SR4trn ($1.1trn) in investment through 2030. The strategy will have a key role to play in injecting funding into the economy for the rest of the decade. In addition to investments generated by the NIS, Shareek is expected to generate SR5trn ($1.3trn) and the PIF is set to contribute SR3trn ($799bn), while the economy will receive SR10trn ($2.7trn) from direct government spending and a further SR5trn ($1.3trn) from private consumption spending in the same period, according to government projections. This represents a total capital injection of SR27tn ($7.2trn) by 2030.

Energy Resources

Saudi Arabia is one of the most important oil producers in the world, boasting 17.2% of total crude reserves at the end of 2020, according to BP’s “Statistical Review of World Energy 2021” report. Total proven oil reserves at end-2020 were estimated by BP at around 298bn barrels. Saudi Arabia has an oil production capacity of 12m barrels per day (bpd), though it produced roughly 11m bpd in 2020, according to the multinational. It is aiming to boost capacity beyond 13m bpd as it seeks to consolidate its dominance in the market, particularly in light of the West’s shift away from Russian crude in the wake of the invasion of Ukraine in 2022. The main player in the energy industry is state-owned Saudi Aramco, which controls nearly all of the country’s oil and gas reserves, and is estimated to be the world’s largest oil company. In line with Vision 2030, the initial public offering of 5% of Saudi Aramco’s shares was made in November 2019, raising $25.6bn.

Saudi Arabia is one of the five founding members of the Organisation of the Petroleum Exporting Countries (OPEC) and was traditionally considered the global swing producer. In 2017 Saudi Arabia headed an historic agreement between OPEC and non-OPEC members to curb global oil production in an effort to stabilise prices, and took the lead on similar measures during the pandemic.

At the end of 2020 Saudi Arabia accounted for about 3.2% of global natural gas reserves – and 16% of total GCC reserves – making it the seventh-biggest producer of natural gas in the world. Currently, the Kingdom has the lowest intensity of gas burning in gas plants worldwide, at less than 1%, and plans to completely eliminate gas burning by 2030. In recent years, Saudi Aramco has discovered five new natural gas fields across the country, with the potential to produce a combined 100m cu feet per day, and it seeks to boost production of the fuel. These discoveries include the Jufrah gas field, projected to hold 200trn cu feet of gas and the site of an estimated $110bn investment, which Saudi Aramco could open to international investors.

Expanding gas output has become a priority for Saudi Arabia as it looks to cut the amount of oil burned for power production, while also hitting a goal of reaching net-zero emissions by 2060. In addition to power generation, natural gas can serve as cleaner feedstock for manufacturing and water desalination activities. Saudi Arabia also aims to use the Jufrah gas field to produce energy from hydrogen, an emerging green industry estimated to be worth $700bn globally by 2050.


Riyadh is located in the Nejd region, a rocky plateau that covers a large swathe of land in central Saudi Arabia. Jeddah, meanwhile, is located on the Red Sea coast and is bordered by the Sarawat Mountains to the east. At the administrative level, the Kingdom is organised into 13 provinces, including the Eastern Province – which is home to the bulk of Saudi Arabia’s oil reserves – Riyadh Province, Makkah Province and Medina Province. Each province has its own provincial capital. The provinces are further divided into between three and 20 governorates, with a total of 118 throughout the country. Each of the governorates are divided into sub-governorates for greater local oversight.


Saudi Arabia is a monarchy and the royal family is the Al Saud, the direct descendants of King Abdulaziz, the country’s founder. The current monarch, King Salman bin Abdulaziz Al Saud, assumed the throne following the passing of his half-brother, King Abdullah bin Abdulaziz Al Saud, in January 2015. Since then King Salman has abolished a number of government councils, subsequently replacing them with two major councils: the Council for Political and Security Affairs, and the Council for Economic and Development Affairs, both of which are currently chaired by Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud.

In 2015 King Salman named Prince Mohammed bin Naif Al Saud as the crown prince, but he was relieved of the title in June 2017 and replaced by the then-Deputy Crown Prince Mohammed bin Salman, the son of King Salman. Crown Prince Mohammed bin Salman is widely seen as a moderniser, seeking to meet the needs and aspirations of the population in a rapidly changing world while asserting Saudi Arabia’s influence on the global stage.


The top governmental body in the Kingdom is the Council of Ministers, or the Cabinet, which is led by the ruler and consists of 30 royally appointed ministers serving four-year terms. The government’s relationship with, and its responsibilities towards, its citizens is codified by the Basic Law, which was passed by King Fahd in 1992.

The Majlis Ash-Shura, or Consultative Council, has an advisory role in the government and is made up of 150 members, all of whom are appointed by the king. However, the organisation has limited powers and cannot pass or enforce laws. The body broadly serves as a forum for policy debates, and it can interpret existing laws and propose new legislation to be passed by the ruler. The council advises the king on a variety of issues, including the annual budget and long-term economic development plans. The Consultative Council also has the power to call ministers in for questioning. Around 70% of the members of the current council hold PhDs, many of which were granted from US and UK universities. Women make up one-fifth of its total membership.

While the governmental body is primarily an advisory group, it has gained a substantial number of new powers over the past decade. For example, its mandate now includes participating in the Kingdom’s complex budgeting process, which was considered to be a significant increase in responsibility.


In 2006 a law formalising the succession process in the Kingdom was announced. Following the death of the reigning monarch, a committee composed of male heirs of King Abdulaziz is convened to officially name the crown prince as the new king. This law helped facilitate a smooth transition in 2015, with the accession of then-Crown Prince Salman to the throne.

Power has traditionally been held by King Abdulaziz’s sons, with accession passing from brother to brother. The appointment of Prince Mohammed bin Salman as crown prince overturned decades of royal custom, as succession from father to son had only taken place once before in Saudi Arabia’s history.