Dow Reportedly Weighs Exit From $20 Billion Saudi Aramco Chemical Venture

Dow is considering an exit from its $20 billion chemical partnership with Saudi Aramco as it navigates a severe industry downturn and regional conflict, according to a Bloomberg News report citing people familiar with the matter.

The potential divestment involves Dow's 35% stake in the joint venture, Sadara Chemical Co. While no final decision has been made, the move is part of a broader strategic review by the U.S. chemical producer.

Potential Sale Details

According to the report, Saudi Aramco could acquire Dow's holding in the venture. However, the stake could also be offered to other strategic or financial investors. The Sadara complex, located in Jubail, Saudi Arabia, has an annual production capacity of over 3 million metric tons of chemicals and plastics.

Dow did not immediately respond to a request for comment, while Aramco declined to comment, Reuters reported. The news sent Dow's shares down by more than 1% in trading.

Industry and Geopolitical Pressures

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The potential exit comes as the global chemical industry grapples with stagnant demand, rising production costs, and persistent oversupply. These challenges have been compounded by geopolitical tensions in the Middle East.

In July, Dow stated that the conflict in the region had disrupted oil and petrochemical flows, constrained supply chains, and increased operating costs. These disruptions led to a temporary shutdown of production at the Sadara complex earlier this year.

Financial Context

This consideration is consistent with Dow's recent efforts to improve profitability. The company announced plans in January to reduce its workforce by 13% and has been reviewing its global portfolio, including European assets in 2024.

Dow's investment in Sadara has faced financial headwinds. As of June 30, the company reported a negative investment balance of $793 million in the joint venture. Dow suspended its recognition of losses from Sadara during the first quarter of 2026.