The role of Ibn Saud in Saudi Arabia cannot be overstated. The state grew inexorably as a result of his domination of the Arabian Peninsula in the early twentieth century as the Ottoman Empire declined. After the end of World War I, he consolidated his position and became king in 1925. The realm was renamed the Kingdom of Saudi Arabia seven years later. The fortunes of the kingdom were transformed with the discovery of petroleum in the 1930s.
American oil companies (Chevron in particular) played the leading role in oil exploration and formed a partnership with the Saudi monarchy, paying royalties for the right to extract and ship Saudi oil. The importance of oil during World War II enhanced the Saudi-U.S. relationship, and in 1944, the Arab-American Oil Corporation (ARAMCO) was formed. President Franklin D. Roosevelt helped to cement the growing relationship when he met with Ibn Saud on an American destroyer in 1945. The Saudi monarchy thus maintained close economic and strategic ties to the United States throughout the remainder of the century.
Because of the growing strategic importance of the Middle East and its oil reserves to Cold War geopolitics, both the United States and the Soviet Union sought increased influence in the region. The Soviets endorsed the rise of secular, socialist, Arab nationalist regimes in Egypt, Iraq, and Syria, and Soviet military assistance was crucial to these nations in their ongoing struggle with Israel after its founding in 1948. The United States countered these Soviet moves by tightening its ties to the royal regimes in Iran and Saudi Arabia.
In 1962 civil war broke out in Yemen as a nationalist faction supported by Egyptian President Gamal Abdel Nasser sought to overthrow the royal government there. Despite previous rivalries with the ruling house of Yemen, the Saudis gave financial support and military assistance to the Yemeni monarchy. Egypt and Saudi Arabia thus confronted each other directly in the conflict. The devoutly Muslim House of Saud opposed the rise of secular, socialist Arab nationalism and refused to tolerate the spread of Nasser's Pan-Arabism in the region. In addition, the respective affiliations of Egypt and Saudi Arabia with the Soviet Union and the United States made the Yemeni Civil War a regional theater of Cold War confrontation.
The Israeli issue greatly complicated U.S.-Saudi relations. The Saudis objected to the 1948 formation of Israel, opposed the displacement of Palestinian Arabs, and played a minor military role in the first Arab-Israeli War (1948). The Saudis would contribute significant funds to Palestinian causes until the 1991 Persian Gulf War.
Despite its vehement opposition to Israel, the Saudi government nonetheless maintained tepid relations with Arab nationalist regimes in Syria, Egypt, Iraq, and Jordan, Israel's principal enemies. Thus, Saudi Arabia did not participate in the Arab-Israeli wars of 1956, 1967, and 1973. However, as American support for Israel increased after the 1967 Six-Day War, the Saudis sought to influence American policy. This conflict laid the foundation for the 1973 oil embargo.
Saudi oil was largely controlled by American oil companies until the early 1970s. At that point, the House of Saud negotiated the gradual takeover of ARAMCO by Saudi interests. By 1973, the transfer of control had begun. When Egypt and Syria attacked Israel in October 1973, prompting the Yom Kippur War, Saudi Arabia's King Faisal obtained U.S. President Richard Nixon's assurances of American nonintervention. The Israelis suffered severe reversals in the opening stages of the conflict, however, which prompted Nixon to send U.S. military aid to Israel on 19 October. The next day, working through the Organization of Petroleum Exporting Countries (OPEC), the Saudi government implemented an oil embargo directed at the United States. The embargo made the United States vulnerable to an economic recession, and American fuel prices rose 40 percent during the five months of the crisis. Even after the embargo ended, oil prices remained high for the rest of the decade.
Saudi Arabia emerged from the crisis as the clear leader of OPEC and with renewed respect in the Arab world. Massive increases in oil revenues (from $5 billion in 1972 to $119 billion in 1981) transformed Saudi Arabia into an affluent, urbanized society with generous government subsidies and programs for its citizens and no taxation. The U.S.-Saudi relationship eventually recovered and remained close. Indeed, Saudi Arabia often used its influence in OPEC to keep oil prices artificially low from the mid-1980s to late 1990s.
Such policies, however, had a downside. When oil prices dipped dramatically during 1981–1985, the Saudi economy plunged into recession, presenting the government with significant domestic unrest. A similar scenario was played out in the late 1990s. This time the Saudis acted aggressively, hiking oil prices in 2000 and 2001 to right their foundering economy. Continuing close ties between Washington and Riyadh also played a major role in the 1991 Persian Gulf War, as Saudi Arabia was used as a staging area for U.S. troops during Operation desert storm.
Despite the considerable power that the Saudis wielded in international relations beginning in the 1970s and the tremendous increase in wealth as a result of oil revenues, the House of Saud maintained strict control over Saudi society, culture, and law. Saudi Arabia remained an absolute monarchy until 1992, when the royal family promulgated the nation's first constitution.
Robert S. Kiely
Lacey, Robert. The Kingdom. New York: Harcourt Brace Jovanovich, 1982.; Lewis, Bernard. The Middle East. New York: Scribner, 1997.; Wynbrandt, James. A Brief History of Saudi Arabia. New York: Checkmark Books, 2004.