Ahmed Zaki Yamani: The Saudi Oil Minister Behind the 1973 Oil Crisis Has Dead


Yamani became Saudi Arabia’s Minister of Petroleum in 1962, a rare instance in which someone from outside the Royal Family was promoted to such a position of influence. He would continue to drive Saudi Arabia’s rise as an oil power during a period in office that spans nearly a quarter century.
It was in the 1970s that he became an international figure, vilified in the West for planning an oil embargo after the 1973 Arab-Israeli war. Arab members of the Organization of the Petroleum Exporting Countries (OPEC) cut off supplies. of crude oil to the United States and other industrialized nations as punishment for their support of Israel. In just a few months, the price of crude oil quadrupled from $ 3 a barrel to $ 12. Gasoline rationing was introduced in the United States, as well as a nationwide highway speed limit of 55 mph.

Looking back at the crisis, Yamani told CNN in 2010 that “Arab oil [embargo] was destined, and I was behind, not to damage the economy, just to attract international public opinion that [there] it’s a problem between the Palestinians and the Israelis. ”Yamani’s stated goal at the time of the embargo was to force Israel to withdraw from the occupied Palestinian territory.

But the rapid rise in oil prices was a huge windfall for OPEC members. “Unfortunately, money is very attractive, OPEC members love money and income. And that is why they raised the price as quickly as possible and paid the price for what they did,” Yamani said.

The former oil minister told CNN that he did not regret the embargo. But he had doubts about OPEC’s subsequent efforts to dictate prices.

“I’m sorry for what OPEC did. You can’t really manage the price. It was mismanagement of the price, mismanagement of power,” he added.

Oil ministers including Ahmed Zaki Yamani (seated, mustache and beard) announce that OPEC will lift the oil embargo against the United States.

At the time, OPEC controlled about 80% of world production, a far cry from its diminished status today. (According to their own forecasts for 2021, OPEC’s market share has dropped to around 30%.) The official story of the US State Department crisis says it “triggered a series of US attempts to address the foreign policy challenges emanating from long-term dependence on foreign oil.” Those efforts included boosting domestic supply, and in 2019 the United States became the world’s largest oil producer.

Urban, elegant and fluent in English, Yamani attended Harvard Law School before being led out of obscurity by the future King Faisal to head the Saudi oil ministry. At the time, Saudi Arabia was a mid-range producer. In a decade, it would be a giant. One of Yamani’s enduring accomplishments was increasing Saudi Arabia’s ownership (and income) from the kingdom’s crude production, which had long been dominated by the Western consortium that formed Aramco.

In 1975, Yamani witnessed the murder of his mentor, King Faisal, by a disgruntled prince.

It was a traumatic year for the young minister. On December 21, 1975, he and other OPEC oil ministers were taken hostage in Vienna by a group led by Carlos the Jackal, the most notorious international terrorist of the time. A statement by the attackers demanded a role “for the Arab people and other peoples of the third world” in the management of oil resources.

The terrorists managed to get the Austrian government to provide them with a plane to take them and several of the ministers to Algiers. Carlos planned to kill both Yamani and Iranian Oil Minister Jamshid Amuzegar, but finally agreed to release them after Algerian mediation.

The hostages board a DC-9 in Vienna before flying to Algiers under the surveillance of six terrorists, on December 22, 1975.

Yamani’s fall from grace was due to King Fahd’s demand in 1986 that he ensure an increase in Saudi Arabia’s export quota within OPEC, and that the cartel set a price of $ 18 a barrel. He was unable to meet the king’s goals and was fired shortly after.

In his later years, Yamani said that the price of oil had been distorted by speculation, causing volatile swings. And it wasn’t just speculation. He told CNN: “Don’t forget that politics is important. Anything can happen and it can ruin the oil business or bring it up.”

While remaining involved in the world of energy, Yamani also indulged in his passion for watches, poetry, and the preservation of Islamic texts. He was a deeply religious man and the son of a celebrated religious scholar.

Yamani seized the opportunities of Saudi Arabia’s unique position as an energy producer at a time when the United States, Europe and Japan needed large amounts of its oil. In his interview with CNN in 2010, he said that oil would remain part of the energy mix despite the rise of renewables, but acknowledged that it would not continue forever.

“The stone age came to an end not for lack of stones, and the oil age will end, but not for lack of oil.”

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