Embodiment of Arab petroleum power
Yamani extricated Saudi oil industry from grip of US firms
Saudi Arabia’s Shaikh Ahmad Zaki Yamani, the embodiment of the ascent of Arab petroleum power and the face of the 1973 oil embargo that brought the West to its knees, has passed away.
Yamani was a witness to the 1975 murder of King Faisal who had plucked him, a non-royal, to be oil minister. Later the same year Yamani was kidnapped at an Opec meeting by Ilyich Ramirez Sanchez, known as Carlos the Jackal.
Yamani, 91, died in London on Tuesday. Known for his elegant manner and trademark goatee beard, Yamani’s 24-year tenure running the oil affairs of the world’s biggest crude producer made him a global celebrity during the inflationary “oil shocks” of the 1970s. That ended with his exit in 1986.
In December 1975, Yamani attended the meeting of the Organisation of the Petroleum Exporting Countries (Opec) in Vienna, which ended in a hail of bullets fired into the ceiling from Venezuelan assassin Carlos and five cohorts. Three bystanders were killed.
Carlos, promoting the Palestinian cause, targeted Yamani as the most valuable hostage. Ministers were held for two days in a dynamite-charged room before the captors were granted a plane out of Austria with their hostages. A further 43 harrowing hours on board, flying from Algeria to Libya and back, created an equation between captive and hostage taker. “It was odd, but as we sat together and talked, it was almost as if we had become friends,” Yamani told biographer Jeffrey Robinson. “He was telling me so much, knowing that I would die.”
A deal was struck in Algiers and Carlos vanished, escaping arrest until 1994. Serving a life sentence in a French jail, Carlos has outlived Yamani.
The Stone Age did not end because the world ran out of stone, and the Oil Age will end long before the world runs out of oil.”
Shaikh Ahmad Zaki Yamani
Ahmad Zaki Yamani extricated the Saudi oil industry from the grip of American companies in a series of steps that produced a deal on national ownership of Saudi Aramco in 1976.
Commoner among royals
Yamani’s career was remarkable, for the time, as a commoner in a society dominated by the royal family. Born on June 30, 1930, the son of an Islamic scholar and judge in Makkah, Yamani was expected to follow his father and grandfather into teaching.
After studying law in Cairo he left for New York University and Harvard. Returning to Saudi Arabia, he set up a law firm and took on government work. He soon gained a reputation as a brilliant lawyer and newspaper columnist, drawing the attention of the future King Faisal. He became the country’s oil minister in 1962.
Yamani became a leading figure in the development of Opec, founded in 1960. He extricated the Saudi oil industry from the grip of American companies in a series of steps that produced a deal on national ownership of Saudi Aramco in 1976.
In Yamani’s early years as oil minister, Arab nationalism was on the rise and oil power was at the heart of it. At the time he took over the job, the United States dominated the world’s oil trade and Saudi Arabia was a middling producer, not yet discovering it has much larger fuel resources than its neighbours. By the time of the 1967 Arab-Israeli Six-Day War, Riyadh was ready to flex its economic muscle. Yamani announced a supply embargo against some countries. But the embargo did not bite. High inventories in the West and extra supply from Venezuela and prerevolutionary Iran filled the gap.
In 1973 the fourth Arab-Israeli conflict prompted Yamani to trigger another oil embargo. This time it worked — a fourfold increase in the price of crude marked the high point of Opec power and sent western economies into recession as inflation soared in what became known as the first oil shock.
‘Masters of our commodity’
Yamani summed up that moment when oil producers took charge. “The moment has come,” he said. “We are masters of our own commodity.”
With the end of the war and the embargo, Riyadh found an accommodation with the United States.
Yamani was now a price moderate, espousing the view that high prices would ultimately destroy demand and encourage production from new exploration in places such as the North Sea.
When the 1979 Iranian revolution triggered a second oil shock in the West, most in Opec raised oil prices. Riyadh, close now to Washington, issued the “Yamani Edict”, holding Saudi prices at official levels to ease the pain for importers.
Yamani’s newfound price moderation was to cost him. A supply glut born of the early 1980s recession in the West depressed fuel demand..
In October 1986 he was dropped from the Saudi government. Yamani retreated to his private life and became the figurehead for a consultancy, the Centre for Global Energy Studies. At its launch in London in 1989, with crude still worth only $20 a barrel, he predicted prices would eventually break $100, as they did eventually in the new millennium.
Reuters interviewed Yamani in September 2000 to mark Opec’s 40th anniversary. Shale oil was little known at the time and renewables were in their infancy, but Yamani predicted that technology would hurt oil producers. “Technology is a real enemy for Opec,” he said. “Technology will reduce consumption and increase production from areas outside Opec. The Stone Age did not end because the world ran out of stone, and the Oil Age will end long before the world runs out of oil.”
The US carried out overnight air strikes in eastern Syria on sites connected to Iranian-backed groups believed to be involved in recent rocket attacks in Iraq, the first overt use of military force under President Joe Biden.
The US appears to have chosen the target, just across the border in Syria rather than in Iraq, carefully. It’s a way for Biden to signal he will be tough on Iran while avoiding a response that could offset the delicate balance in Iraq itself or trigger a wider confrontation.
An Iraqi militia official close to Iran said the strikes killed one fighter and wounded four, but the Syrian Observatory for Human Rights said at least 22 fighters were killed in the operation that struck three trucks loaded with munitions coming from Iraq near the Syrian frontier town of Albu Kamal.
‘Unambiguous message’
The US sent an “unambiguous message” with the air strike, the White House said yesterday. Biden is “sending an unambiguous message that he’s going to act to protect Americans and when threats are posed he has the right to take an action at the time and the manner of his choosing,” Press Secretary Jen Psaki said.
Who was in the crosshairs?
The air strike targeted Kataeb Hezbollah, or the Hezbollah Brigades, founded by Abu Mahdi Al Muhandis, a veteran Iraqi militant allied with Iran, who was killed in a US drone attack in Baghdad in January 2020 along with Qassem Soleimani, commander of Iran’s Quds Force.
The US has hit the group before: In December 2019, an American strike along the Syria-Iraq border killed 25 of its fighters and wounded dozens.
Will this escalate tensions?
It is unlikely. Pentagon spokesman John Kirby said: “President Biden will act to protect American and coalition personnel. At the same time, we have acted in a deliberate manner that aims to deescalate the overall situation in eastern Syria and Iraq.”
A Syrian commentator based in Turkey, Abdul Kader Dwehe, said the choice of Syria was a wise one. “Responding in Iraq could open a front that may be hard to close,” he tweeted. “With the Boukamal strike, a valuable point, and a political message rather than a military one, have been made.”
Syria’s foreign ministry condemned the strike as “cowardly American aggression” while Iraq’s defence ministry denied the US had coordinated with it to conduct the strike.
How does this impact Iraq?
The attack is likely aimed at sending a message to Tehran that the US will not tolerate attacks against American interests in the region, while leaving the door open for talks.
Already there are signs that Iraq is being used to fight a proxy war.
Explosive-laden drones that targeted Saudi Arabia’s royal palace in Riyadh last month were launched from inside Iraq, a senior Iran-backed militia official in Baghdad and a US official said this week.