THE FUTURE OF SAUDI ARABIA’S OIL

When Franklin D. Roosevelt met King Abdelaziz ibn Saud aboard the US cruiser Quincy anchored in the Great Bitter Lake in the Suez Canal on 14-15 February, 1945, they forged an agreement that would define the relations between the United States and Saudi Arabia, indeed the entire Middle East, for decades to come: The Americans would be ensured a steady flow of affordable oil in return for US military support for the desert Kingdom Abdelaziz had founded 13 years earlier.

Little is known about what the two leaders had to say on the oil issue, so central to the emerging relationship. But the New York Times observed: “The immense oil deposits in Saudi Arabia alone make that country more important to American diplomacy than almost any other smaller nation.”

Times have changed, economically and politically. Saudi Arabia’s unrivalled power as the world’s leading oil producer is now being outstripped by the United States, thanks to advanced technology known as hydraulic fracturing, or fracking, that has unlocked on an unprecedented scale vast reserves of oil trapped within rock formations rather than accumulated in more accessible underground reservoirs.

On top of this, US power in the Middle East is seen to be waning as President Barack Obama picks his way out of the wreckage of Iraq and Afghanistan and focuses on his “Pivot to Asia” to check China’s rising power.

It appears the strategic bonds established by Roosevelt and Ibn Saud are starting to fray. The House of Saud, having seen Obama throw longtime ally Hosni Mubarak to the wolves during the 2011 pro-democracy uprising in Egypt, must now wonder whether the Americans will eventually leave them in the lurch as well.

In this months edition of the magazine Ed Blanche looks at the future of Saudi Arabia’s oil industry, and how this will affect the nation in years to come.

Each month The Middle East Magazine posts a small selection of stories on it’s website. To receive the full edition of the magazine please go to the home page on the website and follow the subscription instructions.

For digital subscriptions please click the link HERE.