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The Saudi-US relationship has consistently been described as an exchange of oil for security. However, since 1944, when US President Franklin Roosevelt and King Abdel Aziz met in Egypt, Saudi Arabia has used more US goods, management systems, technology, medical facilities, and training than those from any other country in the world. The relationship rested on much more than just oil and seemed robust enough to withstand the inevitable strains of relations. However, the development of Saudi-US relations held the seeds of its own destruction and was all but destroyed after the crisis of September 11, 2001.
Today, Saudis from all ways of life—taxi drivers to merchants, ministers, and princes—will provide visitors with an earful of varied negative aspects of US policy. They speak at length about the perceived shabby treatment of Saudis in the United States: students cannot obtain visas and the ill are denied access to hospitals. The Saudis profoundly resent the controversial treatment of prisoners at Guantanamo Bay and Abu Ghraib. They explain the US invasion of Iraq as a neo-conservative plot by Washington and Israel to weaken the Arab world. They perceive the legal suit against senior royal family members in New York as money-grabbing tactics by trial lawyers. They resent the negative press coverage of Saudi Arabia, especially the stories and editorials in the Wall Street Journal. Many Saudis fear US President George W. Bush’s pre-emptive policy of first strike, which they see as a possible prelude to the United States invading the oil fields of the Eastern Province. Most of all, the Saudis overwhelmingly resent the Bush administration’s support of Israeli Prime Minister Ariel Sharon and his policy of developing new settlements in the West Bank and his ruthless, albeit intifada-related, occupation of Palestinian territory.
In the United States, many members of the media, the US Congress, and a number of US think tanks view Saudi Arabia as responsible for September 11, 2001, primarily because of the systematic development of a worldwide jihad against the United States and its values. The problems extend well beyond September 11. Some see Saudi Arabia as using its fabulous oil wealth to maintain a corrupt regime, and through its control of OPEC, blackmailing the United States into overpaying for its oil. They see Saudi Arabia as oppressing women and promoting religious intolerance—both within Islam and between Islam and the Judeo-Christian world. The reports of the arrests of Christians for merely attending a service, the interdiction of owning a Bible, the arrests of Sufis, or the oppression of the Shi’a are all well publicized. Numerous articles on the corrupt and profligate ways of many Saudi princes add to the strong resentment of Saudi Arabia. Of course, the Saudi state was also heavily criticized before September 11, 2001, for not cooperating with the US Federal Bureau of Investigation in the investigation of the Al-Khobar bombing, which killed many US personnel. After September 11, 2001, the Saudis were further criticized for not adequately tracking terrorist funding.
The Common Interest
The Saudi-US relationship started with a common interest in oil. US companies founded Saudi Aramco after British Petroleum had written off the desert kingdom. Aramco, under US leadership, trained the large number of Saudis who now comprise 92 percent of the country’s work force. The US oil company’s shares in Aramco were eventually purchased by the Saudi government in the mid-1980s. Nevertheless, Saudi Aramco still uses US management and has become one of the world’s most respected oil companies. Aramco is largely free of political interference and all of Saudi Aramco’s senior managers hold degrees from US universities and speak fondly of the United States.
The United States is also responsible for designing Saudi Arabia’s remarkable industrial development. The industrial cities of Jubail and Yanbu were designed by Bectel. The Saudi development bank, Saudi Industrial Development Fund, was organized by Chase Manhattan Bank. The electric grid uses US standards and was to a great extent designed by Stone and Webster after 1975. The largest petrochemical joint ventures are between Sabic, a state-owned company, and ExxonMobil as well as ChevronTexaco. The University of Petroleum and Minerals, which trains oil engineers, was designed by US nationals, as were the most advanced hospitals in the country.
The financial links between the authorities of Saudi Arabia and the United States were also quite strong. The Saudis kept most of their oil income in US dollars, invested in US government treasury bills, thereby financing part of the chronic US deficit. All Aramco oil sales are in dollars and are paid in US banks who then pass on the money to Saudi Arabia’s institutions’ accounts, which are held in the same banks. JP Morgan has had a permanent adviser at the Saudi Arabian Monetary Agency for a number of years. The two countries are inextricably linked in terms of finances.
Military cooperation is yet another area of extensive relations. The joint Saudi-US military commission in Riyadh designed and arranged for the purchase of huge arms systems including F-15s, F-16s, AWACS, tanks, and missiles. These arms systems are maintained by US firms or British firms using US parts. The Saudi National Guards are trained by Vinnell Corporation. After the 1990 Gulf War, the United States maintained a command center for the region together with a large number of troops and airplanes in the Prince Sultan air base in Al-Kharj south of Riyadh.
Until recently, all these links translated into hundreds of billions of dollars in purchases in the United States by the Saudis. To this day, Saudi Arabia imports more than US$4.5 billion per year from the United States. Even though the number has substantially declined from the US$10.5 billion of imports in 1998, it is still more than from any other country. The links between the United States and Saudi Arabia involved tens of thousands of Saudis and US citizens working together, which should have provided ample opportunity for extensive cultural exchanges and societal influence between the countries.
Previously, the Saudis helped the United States by increasing oil production in times of supply stress. In 1982, when both Iran and Iraq were forced to reduce their production, the Saudis increased oil exports from 4.5 million barrels per day (mbd) to 7 mbd, bringing the spike in price to a rapid end. In 1990, when both Kuwait and Iraq stopped exporting, Saudi Arabia increased production to 9 mbd. After September 11, the Saudis increased production by 500 mbd to help the United States meet its needs at reduced prices. The Saudis also point out that Aramco sells its oil in the United States and in the process subsidizes US purchases by over one US dollar per barrel on the 1.5 mbd it sells to US firms. The Saudi Oil Minister repeatedly claims to want a stable price of oil between US$22 and US$28 per OPEC barrel (corresponding to about US$26 to US$34 per US-based barrel). The Saudis have provided the United States with the assurance that they will remain the stabilizer of world oil prices.
