America’s largest oil refinery is now fully owned by Saudi Arabia. The Port Arthur refinery in Texas is North America’s largest oil refinery, and as of this week, Saudi Arabia controls all of it, CNN Money reports.
With the stroke of a proverbial pen, Saudi’s state-owned oil giant Aramco took on 100 percent ownership of the port, cementing its access to the lucrative U.S. energy market at a critical time.
In the latest deal, finalized Monday, Aramco gained full ownership of Port Arthur and 24 distribution terminals in a boon to investors eyeing the IPO. Before that, Aramco had a 50-50 stake in the refinery with Anglo-Dutch oil giant Royal Dutch Shell. Port Arthur, referred to as the “crown jewel” of U.S. refinery infrastructure, can process 600,000 barrels of oil a day.
Aramco is slated to go public next year and the government is hoping the IPO can net $2 trillion — the largest IPO in history by a long shot — to score some sorely needed cash. “This Port Arthur deal is about Saudis getting prepared to try and value Aramco at the highest amount they can before they go public,” said Andrew Holland, an energy expert at Washington-based think tank American Security Project.
A Saudi state company controlling the largest U.S. refinery could be a national security headache, experts say.
“The optics aren’t good,” said Bud Coote, a former energy analyst for the CIA and now with Washington-based think tank the Atlantic Council.
The deal comes as President Donald Trump decided to backpedal on repeated campaign promises to wean the United States off foreign energy. Trump said in a May 2016 speech that he wants to bring about independence from “our foes and the oil cartels.” He also threatened before he was elected to halt imports of oil from Saudi Arabia and other Arab countries if they didn’t commit ground troops to fight ISIS.
Trump has since backed away from those statements, and U.S.-Saudi relations appear to be flourishing based on recent bilateral meetings. Saudi Arabia’s powerful deputy crown prince Mohammed bin Salman met with Trump in the Oval Office in March, a meeting heralded by the kingdom as a “historic turning point” between the two countries.
