Finacial advisors, who had been working on the $2tn (£1.5tn) stock market listing, have been disbanded, Reuters said, citing four industry sources.
Saudi Aramco was considering floating 5% of its shares, possibly in London, Hong Kong or New York, in addition to a listing in Riyadh.
It was all part of Saudi Arabia’s Crown Prince Mohammed bin Salman’s plan to open up the economy to international investors.
Plans initially stalled after investment bankers failed to reach Prince Mohammed’s $2tn valuation.
Saudi Aramco has decided to focus on acquiring a “strategic stake” in petrochemicals maker Saudi Basic Industries, Reuters said, citing two sources.
“The decision to call off the IPO (initial public offering) was taken some time ago, but no-one can disclose this, so statements are gradually going that way – first delay then calling off,” a Saudi source familiar with the IPO plans told Reuters.
Saudi Aramco, the world’s biggest oil and gas company, made $33.8bn in net income in the first six months of 2017.
In June, London’s Financial Conduct Authority relaxed rules for state-owned companies wanting to list on the London Stock Exchange, opening the way for Aramco to float in London.
Saudi Aramco and authorities did not respond to the report.