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1965

Abdallah al-Tariqi, 'The Nationalization of the Arab Oil Industry: A National Necessity' (Excerpts)

The full version of the text excerpts included here was reprinted in a collection of the works of its author, Abdallah al-Tariqi (1919-1997), who had first published it in its Arabic original in the journal Dirasat ‘Arabiyya and before held it as a speech, in 1965 at the Fifth Arab Oil Conference in Cairo.

Al-Tariqi was born in what would become Saudi Arabia. He was educated at Fuad I (now Cairo) University Egypt (B.S.) and the University of Texas (M.A. in petroleum engineering and geology), and trained for another year in the US oil industry before returning to Saudi Arabia in 1953. The next year, he became Director-General of Petroleum and Mineral Affairs in the Ministry of Finance and National Economy. As such, he was inter alia responsible for relations with the then only oil company in Saudi Arabia, a conglomerate of four US firms called the Arabian American Oil Company (ARAMCO), which had received a concession in 1933, first found oil in 1938, and began extraction from the end of World War II. While taken by the anti-imperialist stance and policies of Egypt President Gamal Abdel Nasser (1918-1970), al-Tariqi in the 1950s was a reformist modernizer. He accepted the royal Saudi political system and the kingdom’s relationship with the United States. But he was determined to greatly improve Saudi oil income and negotiation position vis-à-vis the US company, often upholding as a model Venezuela’s Creole Petroleum Company.

In parallel, he worked for more coordination between oil producing countries, to improve their position vis-à-vis Western companies. In 1957, he helped bring about a Saudi-Iranian oil information exchange agreement. In 1959, he was a driving force behind the First Arab Oil Conference, in Cairo. And there, he, the Venezuelan Minister of Mines and Hydrocarbons Juan Pablo Pérez Alfonzo (1903-1979), and a Kuwaiti, Iraqi, and Iranian delegate concluded a momentous agreement. Though informal, it “marked the first real steps toward creating a common front against the oil companies,” as Daniel Yergin put it in his classic work The Prize (1991). The agreement laid the foundation for the birth of the Organization of Oil Producing Countries (OPEC) in 1960 in Baghdad, analyzed by Giuliano Garavini in The Rise and Fall of OPEC in the 20th Century (2019).

In 1960, too, al-Tariqi became Minister of Petroleum and Mineral Affairs. But in 1962, a clash within the Saudi ruling elite cost him both his post and his ARAMCO board membership. He left Saudi Arabia; co-founded an independent oil consultancy in Beirut; and accentuated his view that oil is a global rather than country-by-country issue that needs a united Arab solution vis-à-vis the West. In parallel, his language became more pointed: he now talked about colonialism. And he embraced the nationalization of oil. This had worked in Latin America in the late 1930s when the US government needed its neighbors’ goodwill as clouds of war were gathering over Europe—but it had failed in Iran where a CIA-led coup removed Prime Minister Muhammad Musaddiq (1882-1967) in 1953, scaring Middle Eastern oil officials until the early 1960s