This paper provides an important overview of the reliance of Saudi Arabia’s economy on oil export revenues. Besides, it explores how oil production as natural resources plays a significant role in the Saudi Arabian economy. Moreover, it also highlights why the Saudi government pegged its currency to the US Dollar to avoid currency fluctuation and eliminate uncertainties in international transactions if oil prices highly fluctuated. As oil as a commodity is priced in the US dollar, this paper showed how oil price volatility impacts both the world economy and Saudi Arabia in particular. The role of oil revenue and accumulation of Saudi foreign assets will be explained, and its economic significance is highlighted. The current study is primarily explanatory in nature. The findings depict that oil revenues served in the country’s first five decades to pay for government spending on much-needed infrastructure, but it was evident that the economy at some point had to diversify to avoid the deficit in the government budget when oil revenues shrink. The rationale for establishing the Saudi Arabian Monetary Authority (SAMA) was to effectively manage two things: the flow of current account surpluses and the foreign currency reserve. Finally, SAMA is the central bank in Saudi Arabia, and it has continued to play an essential role in the Saudi economy, especially in managing foreign reserves. This paper contributes to the literature by providing important details on Saudi Arabia’s economy’s reliance on oil export revenues. This paper shed light on how scholars can reduce the Saudi economy’s reliance on oil price volatility by investigating how to manage the Saudi Foreign Reserves during oil price declines.

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