Are The Rockefellers Behind Saudi Arabia's Wealth?

Key Concepts:

• Al Saud family origins and rise to power
• Muhammad bin Abdul Wahhab and Wahhabism
• Standard Oil and the Rockefellers' influence
• Aramco's creation and development
• Oil discovery in 1938 and its impact
• US-Saudi alliance and its evolution
• OPEC and Saudi Arabia's role in it
• Petrodollar system
• Saudi Arabia's diversification efforts
• Public Investment Fund (PIF)
• Human rights concerns and controversies
• Neom project

1. Historical Foundations and the Rise of the Al Saud Dynasty

• In 1744, Muhammad bin Saud, a ruler, allied with Muhammad bin Abdul Wahhab, a religious leader preaching purist Islam (Wahhabism). This alliance provided religious legitimacy to the Al Saud's territorial expansion.
• The Al Saud family faced setbacks, including exile in 1818 after Ottoman forces crushed their rule.
• Abdul Aziz bin Saud emerged as a key leader, capturing Riyadh in 1902 and unifying the region by 1932, becoming the undisputed king.
• Abdul Aziz consolidated power through strategic marriages with daughters of powerful tribal and clerical families, creating a vast royal bloodline. He had 45 sons and at least 22 wives.

2. The Pivotal Role of Oil and the Rockefeller Connection

• Before oil, Saudi Arabia was a poor, isolated nation dependent on revenue from pilgrimages to Mecca.
• In 1933, a landmark agreement was signed between Saudi Arabia and Standard Oil Company of California (a Rockefeller legacy company), leading to the creation of Aramco.
• The discovery of oil on March 3, 1938, in Dharan transformed Saudi Arabia into a global energy giant.
• The US established a critical air base in Dharan during World War II, securing a foothold in the Middle East and control over vital trade routes.

3. The US-Saudi Alliance: A Symbiotic Relationship

• After World War II, the US needed more oil, and Saudi Arabia needed security. This led to a deeper alliance, with American engineers and advisors pouring into Saudi Arabia.
• Saudi students and officials traveled to the US, fostering a relationship of mutual benefit.
• The alliance caused internal tensions with Wahhabists due to the lavish lifestyle of the royals, conflicting with Islamic principles of simplicity.

4. Navigating Tensions and Asserting Control over Oil

• Tensions arose between the US and Saudi Arabia due to foreign influence and a feeling of being outsiders.
• King Saud faced financial difficulties due to lavish spending and sought more money from Aramco, which resisted.
• In response, Saudi Arabia implemented a new income tax decree, taking 50% of Aramco's profits.
• Aramco initially resisted but eventually agreed to a 50/50 profit split after Saudi Arabia pointed out that Standard Oil had a similar agreement with Venezuela.
• President Harry Truman's administration introduced the "golden gimmick," granting American oil companies a tax break equal to 50% of their oil sales, securing US influence.

5. Gradual Nationalization and the Rise of OPEC

• Saudi Arabia gradually increased its stake in Aramco, starting with 25% in 1973, 60% in 1974, and 100% by 1980, without causing conflict with the US. This was termed "participation," not nationalization.
• In the 1960s, Saudi Arabia joined forces with Venezuela, Iraq, Iran, and Kuwait to form OPEC, controlling oil production and stabilizing prices.
• Saudi Arabia became the central figure in global oil politics due to its vast reserves and ability to influence supply and prices.
• In 2023, Saudi Arabia accounted for 35% of OPEC's crude oil output, more than double that of Iraq.

6. The Petrodollar System and Economic Diversification

• Since the 1970s, nearly every oil deal has been done in US dollars, strengthening America's currency.
• The petrodollar system guarantees financial ties between Saudi Arabia and the US, with Saudi Arabia investing billions of its profits back into US banks and treasury bonds.
• Saudi Arabia's Public Investment Fund (PIF) is expected to reach $2 trillion in assets by 2030, focusing on direct investments, key sectors, and sustainability.

7. Controversies and Challenges

• The murder of Jamal Khashoggi strained relations and led to efforts to improve the kingdom's reputation.
• Human rights abuses, including strict laws and the male guardianship system, have drawn criticism, although some improvements have been made.
• Regional conflicts in Yemen and tensions with Iran and Qatar continue to pose challenges.
• Critics claim that despite the wealth of the royals, millions of ordinary Saudis struggle, with limited official data on poverty.

8. Conclusion

The transformation of Saudi Arabia from a land of nomadic tribes to a global powerhouse is a story of strategic alliances, oil wealth, and calculated political maneuvering. The Al Saud family, with its deep historical roots and shrewd leadership, has navigated complex relationships with global powers, particularly the US, to secure its position. While the kingdom faces challenges related to human rights, economic inequality, and the eventual decline of oil, its diversification efforts and strategic investments suggest a vision for a future beyond oil. The legacy of the Rockefellers and Standard Oil remains intertwined with Saudi Arabia's rise, highlighting the enduring impact of early partnerships on the kingdom's trajectory.