This past weekend marked the 69th anniversary of the meeting between King Abdul Aziz, the first monarch of Saudi Arabia, and US President Franklin Roosevelt. Since then, Saudi-US relationship has endured and prospered, overcoming many challenges in the process. But can it withstand US policy failure in Syria and the nuclear deal with Iran?
The historical meeting took place on Feb. 14, 1945 aboard USS Quincy, anchored near Egypt. Roosevelt came directly from Yalta following a victors’ meeting with Stalin and Churchill, just months before the final Allies’ victory in the war.
By that time, King Abdul Aziz had become the undisputed ruler of Arabia. While he had restored his ancestral birthright by retaking Riyadh in 1901, it took him a few decades to unify the country, which took place in 1932 with the proclamation of the Kingdom of Saudi Arabia.
The following year, in May 1933, Saudi Arabia and Standard Oil of California (SoCal) signed a deal to prospect for oil in the Kingdom. Although SoCal had struck oil in Bahrain in 1932, the new concession turned out to be the first major American oil and economic interest in the region.
Under the San Remo Petroleum Agreement of 1920, US oil companies were excluded from major oil deals in the region, where British companies ran the oil business. Saudi Arabia was abandoned as unpromising by British companies, leaving the door ajar for the Americans to fill in, supported by a newly adopted “open door” oil policy, encouraging oil companies to explore opportunities in the region to meet the growing supply shortages.
Saudi Arabia was impoverished and in need of funds to finance the newly unified country, and as such welcomed the new American interest in its oil prospects.
It took the Americans five years to strike oil. Other companies joined SoCal and in January 1944, they formed the Arabian American Oil Company (Aramco). Aramco had a concession to look for oil in an area covering most of the Kingdom. The rest is history.
Aramco and Saudi Arabia partnered to transform the new desert kingdom into a modern state. From almost nothing, Saudi Arabia has metamorphosed into one of the top twenty economies in the world, with a total GDP topping $745 billion, the largest in the Arab world and Gulf region.
Gradually, Saudi Arabia bought out Aramco from its American owners, until it became 100 percent Saudi-owned and run, changing its name to “Saudi ARAMCO.” Its value has been estimated recently at $10 trillion, making it the most valuable company in the world.
Saudi Aramco has under its control the largest proven world’s crude oil reserves, estimated at 260 million barrels, in addition to 285 trillion cubic feet of natural gas reserves. Daily, it produces more oil than any country in the world, except for Russia, which sometimes produces more.
The meeting between King Abdul Aziz and Roosevelt took place in February 1945, just a year after the original Aramco was born. For decades, Aramco and oil figured prominently in US policy toward the region. There were many dimensions to the Saudi-US relationship.
Saudi Arabia has been the main force behind stability in the oil markets. While forcefully defending its own interests and those of producing countries, it has simultaneously sought to safeguard the consumers’ interests by keeping a lid on oil prices during times of turmoil. Alone among oil producers, it has maintained a large idle capacity, at great cost. That excess capacity is then utilized to calm markets in times of crises, be they political or natural.
Saudi Arabia has also been a major force of moderation. Hosting the holiest Islamic shrines, it is the place where Muslims turn for guidance and inspiration. It has largely used that authority to counsel political moderation. It has also spread its oil wealth around, to scores of developing countries, where development and humanitarian aid has contributed to economic wellbeing and stability in countries near and far.
During the decades following the USS Murphy meeting, Saudi Arabia and the US have enjoyed a close relationship, based on common interests. The two countries worked together in the region and elsewhere to further those interests. They had disagreements too, mainly regarding the Palestinian question, but managed to work jointly on the many other issues where they agreed. The relationship was tested a few times, such as in 1967 and 1973, when they took opposite sides of the Israeli-Palestinian conflict. A few times, they “reassessed” their relationship, only to discover that it was worth pursuing.
In 2001, the two countries experienced another crisis. Al-Qaeda, then an obscure organization, had deliberately recruited 15 Saudis to carry out attacks against the World Trade Center in New York, the Pentagon and other American targets. The terrorists were trying to sabotage the Saudi-US relationship, which they considered a major obstacle to their diabolical designs. The attacks strained the relationship, but eventually the two sides joined hands in an effort to defeat Al-Qaeda.
The Syrian conflict is now testing the Saudi-US pact. The US first threatened to use force against the Assad regime, then changed course and reached a deal with Russia to embark on the Geneva process, despite the fact that Russia’s support has been a main factor behind Assad’s intransigence. The US also concluded an interim nuclear deal with Iran, the main power behind Assad. In both cases, it is not evident that the US managed to get any commitment from either Russia or Iran to help broker a peace deal.
The news from Washington this weekend is that the Obama administration is rethinking its options in Syria after Geneva’s failure and Assad’s escalation of the war against Syria’s civilians. It is clear that US-Saudi interests are much too great to allow the relationship to weaken or veer off path. It is probably for this reason that President Obama plans to visit Saudi Arabia in late March. Most likely, he would seek to return the Saudi-US relationship to its historical path. If by then progress has been made on the Syrian peace deal, it would be much easier to achieve that task.
