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The Oil Kings: How the U.S., Iran, and Saudi Arabia Changed the Balance of Power in the Middle East

Wednesday, June 10, 2015

Author: Andrew Scott Cooper

Print Length: 546 pages
Page Numbers Source ISBN: 1439155178
Publisher: Simon & Schuster; Reprint edition (August 9, 2011)
Publication Date: August 9, 2011
Language: English
ASIN: B004G8QSD0

Book Description

struggling with a recession . . . European nations at risk of defaulting on their loans . . . A possible global financial crisis. It happened before, in the 1970s.

Oil Kings is the story of how oil came to dominate U.S. domestic and international affairs. As Richard Nixon fought off Watergate inquiries in 1973, the U.S. economy reacted to an oil shortage initiated by Arab nations in retaliation for American support of Israel in the Arab- Israeli war. The price of oil skyrocketed, causing serious inflation. One man the U.S. could rely on in the Middle East was the Shah of Iran, a loyal ally whose grand ambitions had made him a leading customer for American weapons. Iran sold the U.S. oil; the U.S. sold Iran missiles and fighter jets. But the Shah’s economy depended almost entirely on oil, and the U.S. economy could not tolerate annual double-digit increases in the price of this essential commodity. European economies were hit even harder by the soaring oil prices, and several NATO allies were at risk of default on their debt.

In 1976, with the U.S. economy in peril, President Gerald Ford, locked in a tight election race, decided he had to find a country that would sell oil to the U.S. more cheaply and break the OPEC monopoly, which the Shah refused to do. On the advice of Treasury Secretary William Simon and against the advice of Secretary of State Henry Kissinger, Ford made a deal to sell advanced weaponry to the Saudis in exchange for a modest price hike on oil.

Ford lost the election, but the deal had lasting consequences. The Shah’s economy was destabilized, and disaffected elements in Iran mobilized to overthrow him. The U.S. had embarked on a long relationship with the autocratic Saudi kingdom that continues to this day.

Andrew Scott Cooper draws on newly declassified documents and interviews with some key figures of the time to show how Nixon, Ford, Kissinger, the CIA, and the State and Treasury departments—as well as the Shah and the Saudi royal family— maneuvered to control events in the Middle East. He details the secret U.S.-Saudi plan to circumvent OPEC that destabilized the Shah. He reveals how close the U.S. came to sending troops into the Persian Gulf to break the Arab oil embargo. The Oil Kings provides solid evidence that U.S. officials ignored warning signs of a potential hostage crisis in Iran. It discloses that U.S. officials offered to sell nuclear power and nuclear fuel to the Shah. And it shows how the Ford Administration barely averted a European debt crisis that could have triggered a financial catastrophe in the U.S. Brilliantly reported and filled with astonishing details about some of the key figures of the time, The Oil Kings is the history of an era that we thought we knew, an era whose momentous reverberations still influence events at home and abroad today.

Review

“[A] compelling chronicle of America's involvement with Middle East petroleum states.” —Michael Hiltzik, The Los Angeles Times

The Oil Kings: How the U.S., Iran and Saudi Arabia Changed the Balance of Power in the Middle East (review)
David E. Long

From: The Middle East Journal
Volume 66, Number 1, Winter 2012
pp. 192-194
In lieu of an abstract, here is a brief excerpt of the content:

This is a fascinating book recounting in great detail the triangular oil relationships among the US, Iran, and Saudi Arabia in the years 1969-1977. The research amassed in writing the book is impressive, including interviews with US policymakers and recently declassified US documents related to the historical period under study. The focus is mainly on US oil policy during this period and most of the contents are seen through the eyes of US policymakers.

The author's thesis is that US policies and their impact during these years changed the balance of power in the Middle East and set the tone for US relations with the Gulf oil producers that have survived to the present day. The key events during that time, as he sees it, are: a) in 1969 the US turned from being major exporter of oil to being a net importer; b) in October 1973 AOPEC imposed an oil embargo that lasted until March 1974; and c) in 1977 a "US-Saudi" oil coup foiled a planned OPEC hike in oil prices led by the Shah of Iran that helped create an Iranian economic crisis and led to the Shah's overthrow in 1979, thus enabling Saudi Arabia to replace Iran as Washington's indispensable ally in the Persian Gulf.

The narrative begins when the Shah, who was in the US attending the funeral of President Dwight D. Eisenhower, cemented close relations, including oil relations, with President Richard Nixon. Probably the most intriguing part of the book, however, is the detailed account of US policymakers' responses to the Arab oil embargo in 1973-1974, and in its wake, its pressuring OPEC countries to maintain moderate oil prices. For the US, this was a highly emotional period of economic as well as political crisis both at home and abroad. The account of US policymaking, based in large part on recently declassified materials, is so vivid it is almost like sitting in with senior policymakers, including Secretary of State Henry Kissinger, Defense Secretary James Schlesinger, and Treasury Secretary William Simon, and listening to the often-heated bureaucratic clashes involving egos, turf, and personal and institutional preferences of how best to respond to the various incompatible issues arising from the soaring oil prices. In particular, the author reveals at length some really absurd policy options and contingency plans pushed by Kissinger.

That said, however, in this reviewer's opinion, the author does not entirely validate his thesis. Most of the book consists of historical descriptive narrative of US policy decision-making and diplomatic relations with Iranian and Saudi counterparts addressing the high oil prices and their impact on US and Western European economies. It does cite some Iranian memoirs quoting the Shah, but nonetheless views developments mainly through US eyes. There is certainly a correlation between the descriptive narrative of US policies and the subsequent events that followed, but correlation and causation are not synonymous, and descriptive narrative alone is not a sufficient basis for establishing causality.

One example of misconstruing causality is the author's conclusion that intense US pressure persuaded the Saudis to raise oil production in 1997 to block another OPEC oil price rise led by Iran. He bases his conclusion on declassified US documents referring to secret US-Saudi discussions in which the Saudis agreed to do so, and labels the successful Saudi act a joint "US-Saudi coup." The fact is that US pressure merely coincided with the Saudis' own economic self-interests in moderating prices. In addition, the Saudis had ambitions to become the "swing producer" in OPEC, in effect becoming the leader in determining the rate of oil production and prices.

Another example is the conclusion that ham-handed US policies throughout the crisis caused much of its severity. US policymaking during the oil crisis was at times indeed ham-handed, but it was not as inept as the author implies. For one thing, King Faysal continued to supply oil to US forces fighting in Vietnam throughout the embargo, and the US and Saudi Arabia worked together to end the embargo after only five months.

The only way to judge crisis management accurately is to assess how well the final policy decisions...

About the Author

Andrew Scott Cooper holds advanced degrees from Columbia University, University of Aberdeen, and Victoria University. Dr. Cooper has worked at the United Nations and Human Rights Watch and is a columnist for PBS/Frontline's Tehran Bureau.

*Shargh Persian Daily Interview with Andrew Scott Cooper (June 2015, Persian)

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