The article states that Saudi Aramco controls ~20% of the world's oil supply. The $18 trillion valuation of the global oil industry that you offered would imply a $3.6 trillion valuation for Saudi Aramco. Obviously there are many nuances to this, but $2 trillion is not unreasonable superficially. It's important to note that state owned oil companies tend to trade at lower market caps after IPO for a variety of reasons.
Yes, but they have very cheap production costs which makes their oil more profitable than the average barrel. They have loads of it still in the ground. And finally they also refine and make other petrochemicals. It's quite a valuable firm.
ok, still they have %20 of world reserve. so oil reserves worth 10 billions and %10 of world economy! in US we have more oil consumption than any other nation, do you spend %10 of your money on oil???
You're confusing a stock with a flow. If we all spent 10% of our money on oil, their revenue would be 2% of GDP and market cap would be greater.
Say they have 60% net margin and market discount rate is 5%, fair value would be $180 bn * 0.6 * 20 which gets you comfortably past 2 trillion. Their revenue is over double Google.
Oil isn't just gas for your car. It's also gas for the trucks that move products around, asphalt for the roads, fuel for planes, heating oil for homes, oil used to generate electricity, and oil used to make plastics.
