The Real Reason Aramco Invested 9 Trillion Won in Korea Isn't Just About Crude Oil

The Thought That China Is Bigger

If a Middle Eastern oil-producing nation were to choose a partner, wouldn’t it naturally be China? Their economic scale, political influence, and investment capacity are incomparable. However, this conventional wisdom has been shaken in recent years as we see Saudi Aramco pouring trillions of won into South Korean refineries and the UAE collaborating with Korea on satellite and space technology. Why South Korea, specifically? When it comes to sheer scale, there is Japan, and there is China.

In searching for the answer, I had to start with the fact that what the Middle East wants has changed from the past.

The Reason Oil Producers Started Collecting Taxes

In November 2014, OPEC launched a massive production increase and price-cutting offensive to wipe out the U.S. shale industry. It was a game of chicken. However, the shale industry survived by lowering extraction costs, and ultimately, oil prices plummeted, leaving oil-producing nations with holes in their budgets. Many analyses suggest that it was at this moment they realized they could no longer sustain a national operating model solely dependent on oil revenues.

That is why Middle Eastern monarchies have been clinging to ‘Industrial Diversification.’ It is a transition into so-called ’normal states’—attracting manufacturing, defense, and infrastructure to provide jobs for their citizens and collect corporate and income taxes. Furthermore, leading oil producers, including the UAE, believe the oil era will effectively end by 2050. They have entered a high-speed race to sell their underground resources as quickly as possible before they become worthless, using the funds to foster future industries. This is the background behind some nations refusing OPEC quotas or even threatening to withdraw.

The problem is that ‘attracting industry’ cannot be achieved simply by buying finished goods. They must plant technology within their own borders to move to the next level. This is where Japan stumbled.

The Position Japan Refused

During the period when the UAE was pursuing the development of an independent satellite, Japan refused to transfer technology altogether, citing concerns over technology leaks. In contrast, South Korea trained local personnel and actually handed over core technologies. As a result, the UAE built upon Korean technology to develop 30% of its own indigenous technology, eventually collaborating with NASA to launch a Mars orbiter. One can consistently find in various materials that this single event instilled the perception throughout the Middle East that ‘Korea is a partner that truly shares technology.’

Honestly, I found this quite unexpected while reading. Concerns about technology leaks are common in any country, but it is striking that the next few decades of partnership were determined at that point of divergence. It wasn’t just a one-off contract; it was an accumulation of the asset known as trust.

Why China Is a Burdensome Partner

Then, why is China falling behind? The reason cited is that their economic and political scale is so massive that the Middle East fears a relationship closer to subordination rather than an equal partnership. Conversely, South Korea is seen as a country that possesses top-tier technical and manufacturing capabilities while lacking geopolitical hegemonic ambitions. Being neither too big nor too small has, in fact, become a condition for earning trust.

Differences in business styles are also frequently mentioned. There is an assessment that Japan tends to follow manuals and procedures strictly, which does not mesh well with the emotional and improvisational nature of Middle Eastern business. On the other hand, it is said that South Korea has the flexibility to move quickly according to the situation, and cultural sentiments that value family and close relational distances naturally align with the Middle East. However, since this is a generalization based on observation and experience, there will certainly be variations for each individual company or project.

Inshallah, Bukra, Malish

There are three words frequently mentioned by those who have done business in the Middle East: Inshallah (God willing), Bukra (tomorrow), and Malish (it’s okay, forgiving mistakes). Cultural practices where schedules are delayed without notice and plans change frequently are often called this. Some even call it the ‘IBM business culture’ by taking the first letters, and it is said that enduring this unpredictability with patience and flexibility is the background behind how Korean companies have gone beyond simple transactions to create a multi-party, long-term cooperation ecosystem.

And there is a case where this trust was confirmed with actual money. The world’s largest oil company, Saudi Aramco, invested 9 trillion won in Korea’s S-Oil and even secured a stake as the largest shareholder. This can be read not just as finding a place to sell crude oil, but as recognizing Korea’s refining technology and stockpiling infrastructure as a strategic base for the Asian and global markets.

Trust That Started in the Desert Half a Century Ago

This trust did not emerge overnight. In the 1970s and 80s, it was Korean laborers and technicians who were dispatched in large numbers to Middle Eastern construction sites during the infrastructure boom fueled by oil money. A reputation that ‘Koreans meet their deadlines’ was built while building roads, ports, and plants, and this became a stepping stone for moving into high-value cooperation such as nuclear power, oil refining, and defense. In fact, the case where KEPCO won the contract for the UAE Barakah nuclear power plant and even participated in its operation, or the flow of domestic weapon systems winning contracts in the Middle Eastern defense market, can be read as an extension of this. The initial relationship of oil-for-labor has changed its nature over generations into technology-for-trust.

National strategies like Saudi Arabia’s ‘Vision 2030’ are in the same vein. It is a blueprint to expand the industrial landscape from an oil-dependent economy to tourism, entertainment, and advanced manufacturing. When executing such large-scale national projects, Korean companies consistently appear on the list of partners that Middle Eastern governments repeatedly seek. It is difficult to see it as a coincidence that they are chosen repeatedly across multiple projects rather than for a single large contract.

Should We Trust the Saying That ‘Cultures Align Well’ Too Much?

There is something I want to point out briefly here. The explanation mentioned earlier that ’the sentiments of Koreans and Middle Easterners align well’ sounds plausible, but it is also a claim that is difficult to verify. Cultural compatibility is hard to quantify, and it could be a post-hoc narrative that tries to explain successful cases after the fact. In reality, factors much more specific and contractual—such as whether the promise of technology transfer was actually kept or how flexibly contract terms were adjusted—likely played a bigger role in the foundation of solid cooperation than cultural affinity. While the cultural compatibility theory is an attractive story to explain the results, I want to clarify that the evidence is thin to conclude that it is the cause itself.

The Middle East Cannot Be Lumped Together

Though I spoke of the ‘Middle East’ as one, I should also point out for fairness that the nature of diversification strategies varies by country. The UAE has already advanced significantly as a tourism, finance, and aviation hub; Saudi Arabia is gaining speed late with Vision 2030 at the forefront; and Qatar is turning its eyes toward sports and cultural industries on top of its LNG export base. The nature of the cooperation Korea has with these countries also differs slightly. Cooperation in advanced technology like space and nuclear power is prominent with the UAE, while capital alliances in refining and petrochemicals are central with Saudi Arabia. The big picture that ’the Middle East chose Korea’ is correct, but it is more accurate to view it as the Middle East seeking Korea for different reasons and in different ways for each country.

Placing the Three Countries Side-by-Side

| Category | Japan | China | South Korea |

|—|—|—|—|

| Attitude toward Tech Transfer | Passive due to leak concerns (e.g., refusal of UAE satellite project) | Cooperates but with concerns of subordination | Active, including training local personnel |

| Burden of Scale | Relatively low | Large and massive, making equal relationships difficult | Top-tier technology, no hegemonic ambition |

| Business Style | Manual/procedure-oriented | State-led large-scale projects | Fast and flexible situation response |

| Representative Cooperation Case | Emergency supply agreement level | Numerous infrastructure/construction projects | UAE satellite/Mars orbiter, Aramco’s investment in S-Oil |

It becomes clearer when organized into a table. It was not a matter of different strengths, but a question of who better fits the conditions the Middle East wants right now.

Will This Trust Last?

Looking at it this far, the reason South Korea occupies a special position in the Middle East is quite persuasive. However, whether this is a permanently guaranteed status is another matter. China is also continuously attempting to approach them as a partner for industrial diversification, and it is not impossible that Japan might change its technology transfer policy belatedly. Honestly, I cannot say with certainty whether the current advantage will be maintained as is in the future. It is better to leave it as a question of which country pulls out which card in the next phase.

However, one thing seems relatively clear. If the cooperation until now was at the level of individual projects like crude oil transactions or construction contracts, it is moving toward a much longer-term agenda of energy transition. It seems the key will be which country remains as a partner for the next industrial transition rather than how much capital was invested—the answer to this question is a story still in progress.