Saudi Inc.: The Arabian Kingdom’s Pursuit of Profit and Power
By Ellen Wald – Pegasus Books
Publication date: April 2018, 263 pages
Reviewed by Daniel P. Collins
In Saudi, Inc.: The Arabian Kingdom’s Pursuit of Profit and Power, Ellen Wald provides a history of not only Saudi Aramco, but of the entire history of the Kingdom of Saudi Arabia. The two are tied so tightly together that it would be impossible to tell either story independently. So Wald begins with the early 20th century formation of the Kingdom under King Abdul Aziz ibn Saud, who had consolidated a massive land made up of warring tribes under his rule, naming it after himself.
A year after consolidating power Abdul Aziz was approached by American oilmen interested in exploring the land’s potential oil reserves. They already have struck oil in neighboring Bahrain and believed there could be large oil reserves under the sands of Saudi Arabia. After months of negotiation, a partnership was formed between the King and the forerunner of the Arabian-American Oil Company (Aramco).
Wald digs into how this arrangement evolved differently than other such arrangements that were not nearly as successful:
“As Aramco grew in the 1940s, Saudi Arabia produced more oil, and oil meant money. The king and his government knew this. They also knew that although Saudi Arabia was blessed with a valuable natural resource, the country was not industrialized and lacked modern infrastructure. Its population was largely uneducated and premodern. Saudi Arabia’s advantage was that it recognized its strengths and weaknesses in comparison to others.”
As an American with only a passing understanding of the region, Saudi Arabia has always seemed set apart from the other Arab nations—friends and foes — in the Middle East. It was a curious relationship that did not follow the same predictable patterns as other nations in the region that the United States was sometimes allied with, but often in conflict with as well. If this presented a curiosity to you as well, then Saudi Inc. will be a great learning tool.
Wald has done a tremendous job researching the history of the House of Saud and the evolution of Aramco and provides an in-depth analysis of the people and personalities involved.
When the Saudis eventually took control of Aramco, this is how Wald describes it: “This was not nationalization at gunpoint, like Iran’s nationalization of the Anglo-Iranian Oil Company in 1954, nor was it acquiescence by Aramco. In testimony before Congress, an executive from one of Aramco’s shareholder companies explained that ‘Saudi Arabia paid for [its shares].’”
The relationship between Saudi Arabian leaders and executives from Aramco and the oil companies that owned it was not always smooth. They were contentious, but contentious in a business sense. The Saudis learned from their partners and understood the value that they brought. The Saudis were constantly looking to maximize profits from their natural resources but did not delude themselves into believing that their partners were not adding value as some other nations did.
Wald explains that even during the 1973 oil embargo the Saudis were more concerned with business and ensuring their profitable relationships would last than succumbing to pressure for its neighbors, even though they agreed with them. Wald writes: “it seemed there was little to gain in manipulating oil supplies for politics. Profit came before regional or ethnic affinity, as it almost always had for Saudi Arabia. But, if the Saudis could use the political situation to increase profit and power, they could succeed in both regards.”
Wald points out that this attitude has been consistent from nearly the beginning, even going back to the creation of the State of Israel. She writes: “Even though King Abdul Aziz had expressed concern about the situation of the Arabs in Palestine before, … When he met with President Franklin Roosevelt in 1945, he made it clear to the Americans that their support for the Jews in Palestine would not threaten the U.S.-Saudi relationship.”
Wald explains that even after the Saudis took control of Aramco, it was run as a business and not simply as a resource for money to flow directly to the royal family and government. They had learned well prior that this way was much more profitable for everyone in the end.
Saudi Inc. is an essential text for anyone who wants to understand the unique history of both Saudi Arabia and Saudi Aramco.