Saudi Arabia Invests in a New Kind of Oil – Olive Oil

As the Middle East’s most prominent energy superpower, Saudi Arabia has had little trouble cementing its place at the forefront of the petroleum industry. The kingdom leverages its status as the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC) to exercise control over the world’s energy markets in collaboration with Russia, an arrangement dubbed OPEC+.

Even as the kingdom grows ever richer from the sale of petroleum products, some entrepreneurial Saudis are looking to tap a far different kind of oil: olive oil.

While Saudi Arabia’s notorious desert climate would hardly seem to lend itself to industrial agriculture, one region of the country seeks to challenge that assumption. Al-Jouf, a Saudi province on the border with Jordan, has earned a number of headlines in the kingdom for its production of olive oil. Arab News, a Saudi newspaper with ties to the royal family, even referred to the region as “the olive oil capital of Saudi Arabia” in a laudatory November 2021 article.

Saudi Province Al-Jouf has earned a number of headlines in the kingdom for its production of olive oil.

According to the Arab News article, which also described al-Jouf as Saudi Arabia’s “olive basket,” the region hosts 30 million trees for the cultivation of olives. Saudis imported earlier generations of these trees from France, Greece, Italy, Spain, and Turkey — far better-known producers of olive oil — and al-Jouf now grows varieties of olives that Arab News called “Sorani,” “Improved Nibali,” and “Spanish.” The farmers then sell their products within the kingdom and online. On Amazon, for instance, prospective buyers can find “Aljouf Organic Extra Virgin Olive Oil” in several sizes.

Despite the obscurity of this budding industry outside Saudi Arabia, Saudi officials appear determined to turn their country into a household name among olive oil producers and consumers – similar to the kingdom’s current association with the petroleum industry.

“Given the kingdom’s status in the olive oil industry,” Arab News noted in the article, “authorities and producers in the country work hard to promote the quality of the oil produced there, and to develop the industry.”

In 2019, the website Olive Oil Times reported that the National Agricultural Development Company (NADEC) planned to partner with the Spanish firm GEA Group to develop what the publication labeled “Asia’s largest olive mill” in al-Jouf; the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, holds a 20 percent stake in NADEC, itself an enterprise established by a Saudi royal decree.

Olive Oil Times estimated the cost of the NADEC initiative in al-Jouf at over $3.41 million. The report added that Saudi Arabia’s “olive trees are handled with great respect because of their spiritual value in Islam.”

Boosting production of olive oil will help Saudi Arabia diversify an economy dependent on the petroleum industry. 

In addition to the apparent spiritual benefits, boosting the production of olive oil will help Saudi Arabia achieve three overlapping goals: diversifying an economy dependent on the petroleum industry, accelerating a shift to sustainable agriculture and self-sufficiency, and burnishing the kingdom’s reputation, which has suffered numerous blows under the controversial stewardship of Saudi Crown Prince Mohammed bin Salman. For these reasons, al-Jouf’s much-vaunted olive oil continues to command the attention of officials in Riyadh.

“Today, olives and olive oil are major staples in Saudi Arabia’s culinary scene and are at the center of many exciting production efforts,” gushes Visit Saudi, a website maintained by the Saudi Tourism Authority. Visit Saudi — like Saudi news agencies — boasts that al-Jouf hosts the world’s “largest modern olive farm,” according to Guinness World Records. The website also notes that scholars from Jouf University, home to a number of specialists in agriculture, are collaborating with the University of Jaén in Spain on “research projects” pertinent to olive oil.

Saudi Arabia’s promotion of its olive oil complements the kingdom’s wider investments in sustainable agriculture and tourism, which Saudi officials see as key to diversifying their economy. The Saudi Environment, Water, and Agriculture Ministry is spending tens of millions of dollars on vertical farming, which reduces the parched country’s water footprint. Al-Jouf’s olive oil could also incentivize travel to the kingdom, which intends to attract 100 million visitors in 2030.

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Despite Saudi support for this sector, al-Jouf’s olive groves hardly seem ready to compete on the world market.

Despite Saudi officials’ support for this sector, al-Jouf’s olive groves hardly seem ready to compete on the world market. In 2019, Saudi Arabia exported just $138,000 in olive oil, compared to $145 billion in crude oil. Italy, on the other hand, sold $63.8 million worth of olive oil abroad that year.

Italian olive oil also enjoys far more cultural cachet overseas than its Saudi rivals, even making a cameo in the 1974 hit The Godfather Part II. Saudi Arabia remains better known for a different kind of oil, along with its crown prince’s brash foreign policy, whose low points have included a fruitless intervention in the Yemeni Civil War and the much-publicized assassination of the Saudi dissident Jamal Khashoggi.

Within the Arab world, Saudi Arabia will find further competition. Olive oil from the Palestinian village of Rameh, located in the West Bank, has achieved renown; it received a profile in The New York Times last year. Morocco may represent an even more serious threat, ranking as the world’s fifth-largest producer of olive oil in 2020 with 140,000 metric tons. That same year, Tunisia produced 130,000 metric tons; Algeria, 75,000 metric tons; and Egypt, 25,000 metric tons.

Some of Saudi Arabia’s Arab competitors have found foreign allies. In 2016, the Food and Agriculture Organization (FAO), an affiliate of the United Nations, arranged “a four-day knowledge exchange trip to Italy” for Moroccans and Tunisians involved in the preparation and export of olive oil. The following year, the FAO and the European Bank for Reconstruction and Development partnered with a Moroccan professional association to host a workshop in Meknes for Moroccans working in the industry. Italian and Portuguese experts attended as well.

Saudi advantage comes from how little the kingdom has to rely on the support of international organizations.

Saudi Arabia’s advantage, for its part, comes from how little the kingdom would ever have to rely on the support of international organizations such as the FAO. Armed with revenue from the petroleum industry, Saudi officials have a blank check to bankroll the production of olive oil and fund innovation. This strategy echoes Saudi Arabia’s approach to its other lofty projects, foremost among them Neom, a $500 billion planned city that will run entirely on renewable energy.

This combination of ambition and wealth could make Saudi Arabia a serious rival to Greece, Italy, and Spain – some of the world’s more conventional producers of olive oil. Saudi officials have signaled that, whatever obstacles they face on the world market, they intend to see this unusual initiative to fruition.

If olive oil from al-Jouf ever does start appearing in kitchens and supermarkets across the globe, consumers may no longer associate Saudi Arabia with the lucrative but far dirtier type of oil. For now, though, the kingdom has a long way to go.