Between mid-2003 and mid-2006, Saudi Arabia showed strong economic performance due to high oil prices, increasing oil production and export earnings, paired with structural reforms, economic diversification, and stable macroeconomic policymaking. Saudi Arabia remains heavily dependent on oil and petroleum-related industries, including petrochemicals and petroleum refining. The IMF reported that in 2005, oil export revenues accounted for around 90 percent of total Saudi export earnings, 70-80 percent of state revenues, and 44 percent of the country's gross domestic product (GDP). In order to defend their most significant source of economic growth, Saudi Arabia is increasing its oil production capacity to 12 million barrels per day (bbl/d), by 2009.

Since the recovery of oil prices in the late 1990’s, economic reform has steadily progressed. Such structural reforms paved the way for Saudi Arabia's accession to the World Trade Organization (WTO) on December 11, 2005, twelve years after starting negotiations. Several important sectors, however, remain closed to 100 percent foreign ownership, including: upstream oil, pipelines, media and publishing, insurance, telecommunications, and defense and security. Large parastatal corporations still dominate the Saudi economy, including Saudi Aramco (which has a monopoly on Saudi upstream oil development and controls 98 percent of the country's oil reserves) and the Saudi Basic Industries Corporation (SABIC; now the world's 7th largest petrochemical producer and the largest non-oil company in the Middle East). To date, there has not been a complete sale of state assets to private control, and “privatization” largely has been limited to allowing private firms to take on service functions or offering limited partnerships, particularly foreign investors.

In the context of successfully becoming integrated into the global economy, Saudi Arabia, the largest economy in the Middle East, has emphasized the importance of regional unity among Gulf States -- economically, politically, and militarily. A customs union (with the elimination of tariffs and a common external tariff) among Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) was agreed upon in December 1999, and came into effect in 2003.