In the early 20th century, a young man named Abdulaziz Ibn Saud is determined to reclaim his family's lost kingdom. Born in 1876, Abdulaziz grew up in exile in Kuwait after his family, the House of Saud, was overthrown by the rival al-Rashid clan. In 1902, at the age of 26, he embarks on a daring mission to recapture his ancestral home, Riyadh.
Leading a small band of warriors, he launches a surprise attack on the Masmak fortress, seizing control of the lost city his family used to rule. In the early days of the 20th century, Abdulaziz's victory in Riyadh meant little to that era's Western power. Abdulaziz Ibn Saud was still just a regional warlord.
But Abdulaziz's ambition is far greater. With Riyadh reclaimed, Abdulaziz begins to consolidate power across Najd, the heart of Arabia. Starting any war requires a lot of money to fund campaigns and someone who can acquire the resources needed to make it happen.
For Abdulaziz Ibn Saud, that person was Abdulaziz al-Sulaiman. Sulaiman is Abdulaziz Ibn Saud's most trusted financial advisor. In the early years of Abdulaziz Ibn Saud's conquest, money was hard to come by.
Sulaiman played a key role in raising funds, securing loans, and gaining financial support from local merchants, regional leaders, and allies. Money was crucial in building alliances and keeping loyalty of different tribes in the Arabian Peninsula. Through diplomacy, alliances, and strategic marriages, Abdulaziz Ibn Saud unites warring tribes under his rule.
By 1921, he defeats the Al Rashid family, securing his hold over central Arabia. His conquest spreads to the Hijaz, the region housing the holy cities of Mecca and Medina. And by 1925, he finally brings the Hijaz under his control.
On September 23, 1932, Abdulaziz Ibn Saud proclaims the birth of the Kingdom of Saudi Arabia, making himself the undisputed king of the new desert nation. While Abdulaziz Ibn Saud succeeded in uniting the tribes and founding the Kingdom of Saudi Arabia, the newly formed nation remains impoverished, with limited infrastructure and resources. Despite his military and political victories, the country's vast desert landscape offers little in the way of economic prosperity, leaving it dependent on meager trade and subsistence agriculture.
Even though he ruled an area just larger than Alaska, in 1932, Abdulaziz's capital city of Riyadh still looked much as it had for 100 years. The Saudi Kingdom desperately needed cash. But a monumental discovery is on the horizon, one that would transform Saudi Arabia's fate.
And it would come from a surprising source, deep beneath its sands, uncovered by American hands! With the establishment of the Kingdom of Saudi Arabia, the biggest oil company in America realizes that this could be a great opportunity. Standard oil of California immediately sends a team of geologists to Saudi Arabia and its neighbor, Bahrain, hoping to find oil in the barren deserts of the Arabian Gulf.
It is an endeavor many deemed to be far-fetched. The effort is led by a man named Fred Davies, a geologist working for Standard Oil of California. While Davies knows the potential to profit is unprecedented, he also understands the immense uncertainty and challenge.
The Arabian Peninsula was mostly unexplored and considered unlikely for finding oil. Many geologists believed that the oil-rich fields in Iraq and Iran and Kuwait were exceptions, making them doubt the potential for oil elsewhere in the region. Davies finds an island kingdom in the Arabian Gulf, one he deems to be more promising than other regions, Bahrain.
But the problem is, many explorers and experts have already scoured Bahrain, and they all failed to find any oil. In 1931, Davies and his team set foot on the hot and dusty island, beginning their two-year grueling journey in the midst of intense heat and with rudimentary equipment. But in June 1932, everything changes.
At a depth of over 2,000 feet, the ground finally gives way to what they had been searching for, oil. The Jabel-Dukhan Well, also known as Well No. 1, becomes the first productive oil well in the region, and its monumental discovery bodes well for its neighbor, Saudi Arabia.
After the discovery of oil in the Jabel-Dukhan Well in Bahrain, Standard Oil immediately realizes that Saudi Arabia could be brimming with oil beneath its surface. So the discovery of oil in the area lets Standard Oil to believe that Saudi Arabia may also have oil. The company swiftly initiates negotiations for a concession agreement with the Saudi government.
SoCal, through its subsidiary, the California Arabian Standard Oil Company, is granted the right to explore the Saudi sands for oil. But it will take SoCal another five years of after many challenges, including logistical difficulties and the harsh desert environment, before finally find a viable well. The turning point comes with the drilling of Dammam Well No.
7, affectionately known as Prosperity Well. This well finally strikes oil in commercial quantities in March 1938. Within five years, the California Arabian Standard Oil Company will have a new name, Aramco.
Aramco's oil production continues to operate at increasing speed, despite World War II. And the success was largely due to the industrial capabilities of Americans. They played a crucial role for not only extracting oil, but also creating the infrastructure needed for large-scale oil production in Saudi Arabia.
With Aramco's massive success, Saudi Arabia's wealth skyrockets, especially for the royal family. In the golden glow of newfound riches, King Abdulaziz Ibn Saud summons his trusted ministers, envisioning a transformed realm where sand meets steel. American construction companies like Bechtel pour into the kingdom, securing government contracts to modernize Saudi Arabia's infrastructure.
Colossal cranes rise against the Arabian sky, building highways and cities with American expertise. The wealth generated by oil is unprecedented, rapidly transforming the desert country into bustling centers of commerce and innovation. Up beneath the shimmer of prosperity, unchecked indulgences begin to spiral and whispers of unsustainable extravagance rise.
J. Rives Childs has been the first U. S.
ambassador to Saudi Arabia since 1946, and quickly becomes an important asset in the Middle East due to his unique diplomatic approach. Childs himself cultivated what he described as an unusually close relationship with the king during his nearly four years of service. On one of my visits to his capital, the king went so far as to propose through one of his ministers that I accept a slave girl in my quarters during my stay.
So significant a compliment was almost unprecedented since the Moslem generally regards with abhorrence physical possession of a Moslem woman by an infidel. Despite the massive success of Aramco and the wealth it has generated to Saudi Arabia, Childs soon received some alarming news. In an urgent meeting with Aramco's chief representative, Childs learns of a substantial loan Aramco has approved for the Saudi government, $6 million interest free.
Childs quickly called Washington, and they soon found out that the King and the court had spent far more money than expected. A tribal leader in Arabia needed to demonstrate his strength and control on a continuing basis by providing for the tribe financially. Abdul Aziz saw his kingdom as a giant tribal confederacy that he had painstakingly crafted and diligently bought, married, and fought into submission.
Maintaining order throughout the vast territory was best accomplished by maintaining the traditions that had worked for generations. The Americans realize that if the kingdom continues its spending spree, it could face bankruptcy and social unrest, jeopardizing US financial interests. But what happens next will catch them completely off guard.
The relationship between Saudi Arabia and the United States has come to a critical moment. With an ever increasing demand for more profits from Aramco, King Abdul Aziz Ibn Saud threatens to nationalize Aramco, an action that would prove perilous for both parties. On November 28, 1950, they are forced to sit at the negotiation table.
There's no doubt that if the country faces a financial crisis due to poor fiscal policies, it could also lead to social instability, which might even threaten King Abdul Aziz's rule. This would be a major risk factor for the shareholders of Aramco. But for the king of Saudi Arabia, he needs the ever growing funds for different purposes.
Military superiority was only part of the battle. A tribal leader in Arabia needed to demonstrate his strength and control on a continuing basis by providing for the tribe financially. This meant responding to the needs and bequests of his people promptly and with gifts, justice, and cash.
The negotiation lasts for a month, and neither party wants to compromise. Ever since the establishment of Aramco, the company has taken the majority share of the profits. But now, King Abdul Aziz Ibn Saud makes a bold demand.
He wants 50% of the profits because he believes that is the only fair arrangement. For Aramco, giving away 50% of its profits will severely affect the company's expansion plan, significantly slowing its growth and reinvestment. And the US government also believes it is more important in the long term to keep its Saudi business partner happy than to try and maximize profits for now.
They came out with a very clever arrangement. Aramco decided to give 50% of his profits to Saudi Arabia. At the same time, the US government allowed part of these profits to be claimed as a foreign tax credit, giving Aramco's a significant tax break.
This arrangement came at a big cost to the US government's tax revenue, but it gave both Saudi Arabia and America enough financial incentives to keep the relationship stable and profitable. The Saudis used the Americans' misperceptions of them as unintelligent, greedy, and unmotivated to their own advantage in this situation. Sulaiman and his deputies deliberately led the Americans on, telling them what they wanted to hear and temporarily placating them until the time was right.
The Arabian American Oil Company, whose great Saudi Arabian fields are among the most important in the world has agreed to share its profits half and half with the Saudi Arabian government. Company officials disclosed here today. While securing an advantageous 50-50 profit sharing agreement with the kingdom seemed like a resolution, Saudi Arabia makes yet another shocking demand.
Despite receiving $110 million in 1950 from the Aramco profit sharing agreement, Finance Minister Sulaiman makes an unexpected request. He now demands Aramco to pay in advance on the following year's payment. At this time, the king was getting older and he slowly started passing on responsibilities to the Crown Prince Saud, who had been chosen to succeed him.
But Crown Prince Saud has a spending problem. Saud turned out to be a weak leader. He wanted to please, and the person he most sought to please was himself.
Generally with extravagant luxuries, opulent palaces, and copious amounts of food and drink. Afraid that the king and his crown prince might make rash decisions that could harm Aramco's operations, the company decides to arrange a loan of hundreds of millions for the Saudi royal family from the Export-Import Bank of America. In 1953, at the age of 78, King Abdulaziz faces a decline in his health.
The king's health had been declining for several years. His eyesight had dimmed and his circulation had grown so poor he needed to wear thick socks to keep his feet warm. An injury to his back that he had suffered during his early years of conquest made walking difficult, and he was plagued by arthritis.
He had become less and less involved in state business and preferred to sit in his palace drinking hot coffee and reminiscing. More troubling than his health problems is the uncertainty of succession, choosing the next king to rule Saudi Arabia. Although the king had confirmed that his eldest living son, Saud as Crown Prince, there was still a lot of uncertainty and disagreement.
Many groups like the powerful Ulama and some members of the royal family had not fully committed supporting Saud at that time. To make matters more complicated, King Abdulaziz's second son, Faisal, introduces yet another layer of unpredictability. He sees weakness in his brother and that he will crumble under the weight of the crown.
Prince Faisal, second in line for the crown, headed the Saudi delegation. Although he was King Abdul Aziz's second oldest living son, he was widely known in both Saudi and American circles as more capable than his older brother Saud. He had traveled extensively at the bidding of his father.
Amid the succession uncertainty, King Abdulaziz's Ibn Saud succumbs to his illness and passes away on November 9, 1953. King Ibn Saud of Saudi Arabia, who won a desert kingdom with his sword and huge revenues by shrewd oil leases, died today after a long illness. King Abdulaziz's passing leaves a void that will be felt for generations.
His conquest and unification of the nation were monumental achievements. But his greatest triumph was guiding the country to prosperity through the wealth of its oil. A vision now etched into the skylines of modern cities and reflected in the lives of a thriving people.
But his death threatens to unleash massive turmoil, as the transition of power in the Middle East has often been marked by bloodshed and catastrophe. To make matters worse, at the time of the King's death, Crown Prince Saud is away, making a public appearance in Jeddah. King Abdulaziz dies before Saud can return to Taif.
This brief moment of power vacuum creates a golden opportunity for Faisal to assert his dominance and potentially declare himself the King of Saudi Arabia. But Faisal does the unthinkable. Upon Saud's return, Faisal makes a shocking decision.
He pledges his support to Saud, offering him a ring from their father's hand as a symbol of power. of his loyalty. This gesture sets an example, prompting the court to follow suit and pledge their allegiance to Saud as the new king of Saudi Arabia.
Aamir Saud, the new king of Saudi Arabia, was crown prince from 1933 until the death yesterday of Ibn Saud, his father. The decree fixing his succession was signed by all members of the Royal High Council when he became crown prince. He is 52 years old.
Faisal has missed the opportunity to take charge. He soon realizes the grave mistake he has just made. After the seemingly smooth transition of power from King Abdulaziz to King Saud, the nation's economic situation quickly deteriorates.
By early 1958, the kingdom was on the brink of a serious financial crisis. The country was in debt, and Saud had directed the treasury to print currency to pay for the new government buildings he had decreed should be built. There was rapid inflation.
And soon, a political crisis erupts. Despite his inner conflict about challenging his older brother, Faisal feels a deep sense of responsibility to ensure the survival of his family's rule and the kingdom. In early 1958, after securing the support of his fellow princes, Faisal takes control of the government.
In early 1958, Faisal, having had enough of his brother's fiscal irresponsibility and concern for the survival of Al Saud's rule, staged a bloodless palace coup. Faisal was one of the great leaders I met. But when Faisal makes a visit to the Treasury Department, he makes a distressing discovery.
He realized that the Saudi government had almost completely run out of the Treasury reserves. The gold vault wore nearly empty. Faisal fires the finance minister and takes on the role himself, and he immediately implements strict austerity measures for the country.
And what they're demanding of them is what they're calling austerity. Two things. One, cutting government spending, which is what a company does.
What does a company do when it can't pay its debt? It fires people. It cuts spending.
It sells plants and equipment. It raises money by shrinking. But then the other side is raising taxes and increasing regulations.
Faisal understands that such actions will not make him a popular ruler, but he knows it is crucial for the country to endure short term hardships in order to recover from the financial problems exacerbated by the previous administration. A period of relative economic austerity in Saudi Arabia was predicted by Middle Eastern diplomats today. They said this would be part of a determined effort by Crown Prince Faisal to straighten out the kingdom's finances.
One of Faisal's key measures is to reduce the profit sharing agreement with Aramco, which means that his fellow princes and tribal leaders receive a smaller share of the profits. This decision risks losing their support and weakening his position. The powerless King Saud sees this as an opportunity for a comeback.
In 1961, Faisal establishes a comprehensive budget for the government, understanding that while the recession will eventually pass, the government must maintain a disciplined, frugal approach to spending. For the budget to take effect, Faisal still needs King Saud to sign off on it, an action that was once merely a rubber stamp formality. With the backing of a faction of princes seeking more money and a bigger budget for themselves, King Saud makes a shocking decision.
He refuses to approve Faisal's budget. To Faisal, this is a betrayal of the highest order, leaving him no choice but to resign as finance minister in protest. King Saud is now restored to full power.
Faisal knows that his financial policies have prevented the nation from collapsing entirely. He also understands that it's only a matter of time before another opportunity arises, and when it does, he will be prepared to act decisively, this time without mercy. King Saud's extravagant lifestyle finally takes a toll on his health.
In late 1961, he seeks medical treatment in Boston, United States, and later in Europe. His extended absence abroad presents a clear opportunity for Faisal. Faisal took advantage of his brother's absence as stepping stones to regain his power.
During his brother's absence, Faisal fired Talal, the finance minister, and a close ally of King Saud. And Faisal doesn't stop there. He slowly removes most of the Saud's allies, including Tariki.
By 1963, as Faisal's influence continues to grow, it becomes clear that King Saud's reign is weakening. Eventually, Faisal realizes that a decisive action has to be taken, one that seems all but inevitable. The long struggle for power between King Saud and Crown Prince Faisal of Saudi Arabia is over, and Prince Faisal is in complete control, sources close to royal families said here today.
To solidify his rule, Faisal exiles his brother, King Saud, ensuring he can never regain power. With his position secure, Faisal can now focus on implementing his vision for the country, and he needs someone with the experience and skill to help bring that vision to life Saudi Arabia is on the rise. The discovery of oil has completely transformed the nation.
Aramco has brought immense wealth to the country, wealth on a scale never seen before. A significant portion of this wealth goes into building infrastructure and modernizing the nation. But the Saud family still lays claim to much of it.
And when King Abdulaziz ibn Saud passes away, his eldest son Saud proves to be ineffective and overly extravagant. Under King Saud's leadership, the country plunges into a financial crisis due to rampant overspending. Faisal, Saud's brother, steps in, and through intense political maneuvering, eventually ousts King Saud, becoming the undisputed ruler of Saudi Arabia.
Faisal vows that under his reign, the country's finances will be managed with wisdom and foresight. But to do that, he needs someone smart and capable to serve as the finance minister. The man who will help Faisal transform Saudi Arabia's financial empire has a prestigious educational background.
Zaki Yamani came from a respected family of Islamic legal scholars and later earned degrees from New York University and Harvard Law School. Aramco's division of Arabian affairs, a department responsible for gathering and disseminating information on important Saudis, described Yamani as a "personable young lawyer of 31 years old, with considerable legal background and some practical experience in public administration. " In Jeddah, he built a reputation as a skilled lawyer and became an influential figure as a newspaper columnist.
I didn’t know it then , but Faisal was reading my articles very carefully. I later discovered that he used to read everything I wrote. Yamini was a moderate and friendly person person.
He rarely started any confrontations, preferring to influence others slowly and gradually to get what he wanted. And more importantly, he had a good relationship with the Aramco executives. For Yamani, his role as finance minister comes with immense responsibility and high expectations.
He understands King Faisal's ambitions and is determined to make them a reality. Yamani knows that the most critical driver of Saudi Arabia's prosperity is Aramco, and to secure the nation's future, Saudi Arabia must increase its control over the company. But he realizes that the Americans will not give up ownership willingly.
A long-term strategy is necessary. Yamani did not reveal his vision for Saudi Arabia's oil industry until a conference in Beirut in 1968, where he openly declared that Saudi Arabia desired a 50% share in Aramco. He explained this desire not in terms of Tariq's Arab nationalism, but rather as the best way for Aramco shareholders to guarantee their long-term interests.
During the meeting, Yamani makes a bold declaration, demanding half ownership of Aramco. This is when Yamani's patience and skill really stood out. Yamani and King Faisal were both very patient.
They decided not to push too hard and instead choose to wait and come up with a plan to gradually take control of Aramco. Over the next few years, Yamani skillfully negotiates with Aramco, gradually purchasing shares in the company. By 1972, Saudi Arabia acquires a cumulative 25% stake in Aramco.
But for King Faisal, this is not nearly enough. Soon, a once-in-a-lifetime opportunity will present itself, giving them the chance to take full control of Aramco. Good evening.
The Middle East war produced developments all over the world today. The oil-producing countries of the Arab world decided to use their oil as a political weapon. They will reduce oil production by 5% a month until the Israelis withdraw from occupied territories.
If the Arab countries keep that pledge, it would reduce their production by almost 50% in one year. In October 1973, as the Yom Kippur War erupts between Israel and a coalition of Arab states, the global stage is set for a massive economic shock. In retaliation for Western support of Israel, Arab oil-producing nations impose an embargo, drastically cutting oil exports to the US and Europe.
Oil prices quadruple overnight, leading to fuel shortages, long lines at gas stations, and inflation across the West. Despite initial hesitation, Saudi Arabia joins the embargo, resulting in significant production cuts and sending oil prices soaring. Although Saudi Arabia didn't own more than 50% of Aramco at the time, the kingdoms still control the amount of oil exports, forcing Aramco to cut production and raise prices.
Saudi Arabia leverages its sovereign authority to dictate the amount of oil that the United States has. to dictate the amount of oil exported, effectively compelling Aramco to comply with these production cuts. The rapid rise in oil prices during the embargo brings Saudi Arabia enormous financial gains, and demonstrates the kingdom's growing control over its oil industry by 1974.
Using this newfound leverage, Yamani finally persuades the American owners of Aramco to sell more shares to Saudi Arabia. By the end of 1974, Saudi Arabia secures control of 70% of Aramco, effectively taking over the company. For Yamani, it is a monumental achievement in his career.
He is confident that under Faisal's leadership, Aramco will remain the driving force behind the nation's continued prosperity. For Faisal, owning Aramco means wielding influence on a global scale that his father could never have dreamed of. Controlling a significant share of the world's oil production positions Saudi Arabia as one of the most powerful players on the world stage.
But, Faisal has no idea what fate awaits him next. Zaki Yamani is a master strategist. As a businessman and diplomat, Yamani mastered the art of the game.
He successfully leveraged negotiation, strategic deterrence, and asymmetric information to his advantage, outsmarting his American counterparts. To navigate today's world and its complexity, one must act and think more rationally. Brilliant.
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org slash finius or click the link in the description. You will also get a 20% off an annual premium subscription. On a warm day in March 1975, the royal palace in Riyadh bustles with activity as citizens and dignitaries gather for their regular audience with King Faisal.
He is now a revered ruler for his wisdom and dedication to modernizing Saudi Arabia. Among the crowd that day is the king's nephew, Prince Faisal bin Mousaid, who approaches the king for what appears to be a routine greeting. The two share a brief moment, a gesture of familiarity.
Prince Faisal bin Mousaid moves closer, and in a sudden and shocking moment pulls out a pistol. Two shots ring out, shattering the quiet reverence of the gathering. The bullets strike King Faisal in the head, and the crowd erupts into chaos.
Gravely wounded, the king is rushed to the hospital as frantic efforts are made to save his life. Despite the doctor's best attempts, King Faisal succumbs to his injuries, leaving the nation in mourning and the world in shock. The assassination of King Faisal of Saudi Arabia was recorded on television news film that shows him bending forward to be kissed by the man who shot him.
The Cairo newspaper Al Akbar reported today. Many people believed that it was linked to the death of Prince Khaled bin Mousaid, the assassin's brother, who was killed by Saudi security forces during a protest in 1966. Many believed that Prince Faisal was mentally unstable.
The royal family, stunned by the assassination of their beloved monarch, swiftly takes action. Prince Faisal bin Mousaid is arrested, tried, and later executed by beheading for his crime. The loss of King Faisal marks the end of a pivotal era in Saudi Arabia, as he had been a key figure in modernizing the nation and strengthening its global influence.
The nation mourns deeply for its fallen king, whose legacy leaves an indelible mark on the Arab and Islamic world. After the assassination of King Faisal in 1975, his half-brother, Crown Prince Khaled bin Abdulaziz Al-Saud, succeeds him as King of Saudi Arabia. He knows.
He must honor his late brother by continuing his efforts to modernize the country. For Yamani, the passing of King Faisal is a significant blow to their plan to fully take over Aramco. Little does Yamani know, his own journey will also take a dark turn.
Six terrorists, their weapons concealed in sports equipment bags, burst into a meeting of the organization of petroleum exporting countries here yesterday, shot three persons to death with submachine guns, and held at least 60 people hostage. On December 21, 1975, a group of six terrorists, led by the infamous Venezuelan revolutionary Carlos the Jackal, Illit Ramirez Sanchez, storms an OPEC meeting at the Vienna headquarters. Armed and highly organized, they seize 80 hostages, including Ahmedzaki Yamani and Iran's oil minister, Jamshed Amuzagar.
After two days of tense negotiations, the terrorists transport the hostages to Algiers, where Yamani is eventually released unharmed, despite the constant threat of assassination. A band of pro-Palestinian terrorists who shot their way into the Vienna headquarters of the world oil cartel Sunday, and seized 11 oil ministers and about 80 others as hostages released their remaining captives early today and surrendered in Algiers. Yamani's brush with death leaves a profound impact on him.
A man of deep faith, he believes that Allah spared him for a purpose. Now, more determined than ever, he is committed to fulfilling King Faisal's vision, completing the takeover of Aramco and transforming Saudi Arabia into one of the most powerful nations on earth. By 1976, Yamani finally convinces Aramco to sell 100% of its shares, but at a hefty price of $2 billion.
The Arabian American oil company announced yesterday that a general accord had been reached on major issues involving the total takeover of the company by the Saudi Arabian government. Observers at the time did not understand why the American shareholders were willing to entertain negotiations to sell their shares. Well, the truth is, so long as the Americans could negotiate continued access to Saudi oil for at least a while, they could abide by Saudi ownership.
In fact, it is known that one of points of contention during the various stock purchase negotiations of the 1970s was the contractual guarantee of oil to these companies. Why were the Americans so willing to sell? It's so simple.
The price was just too good. The achievement was largely due to Yamani's strategic use of patience and subtle intimidation. By 1980, the transfer of full ownership is complete, and Aramco is now entirely owned by Saudi Arabia.
Saudi Arabia's full ownership of Aramco in 1980 significantly boosts its geopolitical influence and economic power. Controlling the world's largest oil company allows Saudi Arabia to dominate OPEC, stabilize global oil markets, and wield energy as a diplomatic tool. It also secures 100% of Aramco's profits, funding national infrastructure and modernization projects.
But there was a growing skepticism about whether the kingdom could run the company as effectively as the Americans had. If the country can't manage and run the oil company as effectively as the Americans, Aramco may face declining revenues and strained international partnerships. As a result, Saudi Arabia's global influence could be significantly diminished.
At the time of the buyout, Frank Jungers, a U. S. citizen, remains CEO, and the Saudi government decides to keep him in place to ensure stable operations until a suitable Saudi candidate is found.
One of the great strengths of the Saudi government was their patience. Even after taking over the company, they weren't in any hurry to replace the employees with the Saudi citizens. They even allowed the American CEO to keep his job while they took their time finding a qualified Saudi citizen to lead the company.
By 1988, that person is Ali Al-Naimi. The man destined to lead Aramco to greatness comes from a unique background. Ali Al-Naimi was born in 1935 in Saudi Arabia.
But from a very young age, he already began his career at Aramco as an office boy in 1947. Over the years, he steadily worked his way up the company while pursuing his education in the U. S.
, earning a degree in geology from Lehigh University and a master's from Stanford University. Naimi was one of the first Saudis to rise through Aramco's ranks. He had been executive vice president and was the natural choice to serve as the company's first Saudi CEO.
As the new CEO, Naimi focuses on increasing Saudi Arabia's oil production capacity to meet rising global demand and position the country also as the king of oil. And he also begins executing a crucial step of the plan, make Aramco fully Saudi Arabian. Naimi begins training local talent and steadily increasing the number of Saudi Arabian employees and executives.
Throughout the 1990s, Aramco's power and influence grow, and Saudi Arabia emerges on the global stage as a force to be reckoned with. But neither Naimi nor Saudi Arabia could anticipate a quiet revolution brewing in the background, one that is poised to challenge their dominance like never before. In the early 2000s, deep beneath the United States lay a vast untapped resource, shale oil and gas, trapped in dense rock formations.
For decades, it seemed too difficult and costly to extract. But a small group of pioneering engineers and geologists refused to accept this limitation and their persistence would soon reshape the global energy landscape. The breakthrough came with the perfecting of two technologies hydraulic fracturing or fracking and horizontal drilling.
Fracking involves injecting a mixture of water, sand and chemicals into shale rock at high pressure. creating tiny cracks that allow oil and gas to escape. Combined with horizontal drilling, which extends wells across vast shale layers, these techniques significantly increase the surface area from which hydrocarbons can be extracted.
Though both technologies existed, it wasn't until the early 2000s that their combination began to unlock shale's true potential. The first major breakthrough occurred in Texas' Barnett Shale, where independent oilmen like George Mitchell refined fracking techniques. By 2003, these methods were producing oil and gas at unprecedented levels.
Despite the growing competitive pressure from shales, Naimi makes a grave error by dismissing the threat of shale. Throughout this fracking boom, Ali al-Naimi said he was not concerned. An energy journalist who covered OPEC recalled asking him several times about the growth of shale oil production.
Naimi always said, "No, it's not a threat. I'm not worried about it. " Soon, U.
S. oil production is on the rise, rapidly catching up to Saudi Arabia's output. And the result for Aramco is catastrophic.
The sudden surge in U. S. production leads to an oil glut, and by 2014, oil prices collapse, dropping from over $100 per barrel to below $50.
This price drop shakes the global oil market, severely impacting major producers like Saudi Arabia, Russia, and other OPEC countries. Saudi Arabia, long the world's oil superpower, faces competition it hadn't anticipated. In response, it maintains high production levels in an effort to drive out higher-cost shale producers.
But U. S. shale proves more resilient than expected, quickly adapting to the lower prices.
Take a look at this. The S&P energy index, again, is down 20% during that same time that we saw the recent peak in crude. That's June 20th.
So prices of crude have fallen 24%, and now the S&P energy index has dropped by about 20% in the past. Saudi Aramco was able to keep high production at a low cost during the shale revolution, and also the 2014 oil crash, was its position as a nationalized company with the full support of the government. This forced many other companies and countries out of the business.
Aramco manages to survive thanks to its strength and resilience. By 2017, Aramco remains the largest oil producer in the world, accounting for roughly 10% of global oil production. But the shale revolution has shaken both the company and Saudi Arabia to their core.
A new, charismatic ruler of Saudi Arabia decides that the time has come for a change. Crown Prince Mohammed Bin Salman, born in 1985, is the eldest son of King Salman's third marriage. He quickly rises to prominence within the royal family, becoming Crown Prince in 2017, after his father assumed the throne in 2015.
His ascent involves replacing his cousin, Crown Prince Mohammed Bin Nayef, as the heir apparent, a move that consolidates MBS's power. Saudi Crown Prince Mohammed Bin Salman has detained his uncle, two cousins, and a former Crown Prince, accusing them of plotting a coup. The movie is being seen as an attempt to remove potential rivals to his succession to the throne before his father dies or abdicates.
Two of them have consistently been mentioned as potential replacements for the Crown Prince. Securing his power, MBS launches an ambitious plan to modernize Saudi Arabia's economy through the Vision 2030 initiative. This plan aims to reduce the kingdom's dependence on oil, particularly Aramco, by investing in other sectors like tourism, technology, and renewable energy.
Among the Vision 2030 initiatives is a shocking decision. Saudi Aramco has made it official and taken the record for the largest, biggest IPO in history. A few moments ago, it confirmed $25.
6 billion had been raised with an IPO. Now, that in itself is not the biggest number, but extrapolate out the one and a half percent sold to the total company and it makes Aramco the most valuable publicly traded company in the world. In 2019, the partial IPO of Aramco is launched, selling a small portion of the state oil giant to raise funds for these diversification efforts.
After the 2019 IPO of Aramco, Saudi Arabia enters a new era of economic transformation. The sale of a small stake raises billions for Crown Prince Mohammed bin Salman's Vision 2030, aiming to diversify the economy beyond oil. While Aramco kept leading global oil production, the kingdom began to invest heavily in tourism, entertainment, and renewable energy.
Mega projects like NEOM, a futuristic city, show their move towards innovation. From its humble beginnings, Saudi Arabia rises from the desert sands, transforming from a poor, isolated kingdom into a global economic powerhouse. Through strategic foresight and determination, the nation leverages its vast oil reserves, gains full control of Aramco, and reshapes the global energy landscape.
Today, Saudi Arabia stands as a dominant force in world business, driven not only by its oil wealth, but also by its bold vision for the future. The kingdom's journey from poverty to power is a testament to its resilience and ambition, cementing its crucial role in shaping both the global economy and its own destiny.
