Life & Style | People

King Faisal's lieutenant on world stage

Ahmad Zaki Yamani used Saudi Arabia's position as a leading oil producer to great effect

  • By Joseph A. Kechichian, Special to Weekend Review
  • Published: 00:00 April 9, 2010
  • Weekend Review

  • Image Credit: Supplied
  • Ahmad Zaki Yamani was the mind behind Saudi Arabia's prudent energy policies that helped the country to rise to a position of strength in the world arena

Ahmad Zaki Yamani was the quintessential Saudi Arabian commoner who served Al Saud in defending the kingdom's oil interests. Few men left as deep an impact on a specific but key sector of the Saudi economy as he did. Empowered by King Faisal Bin Abdul Aziz to impose an epoch-making embargo against the United States and the Netherlands in the aftermath of the October 1973 Arab-Israeli War, Yamani became the face of the post-colonial Arab official who implemented tough decisions. A minister of petroleum and mineral resources from 1962 to 1986, Yamani was the architect who devised the energy policies of his country and served as the most visible and a highly influential spokesman for Saudi Arabia and for the Organisation of Petroleum Exporting Countries (Opec) when doing so was an unpopular task. For almost three decades, he witnessed history and contributed to it, while remaining faithful to crown and country.

A bureaucratic ascendance

Yamani was one of the first able and articulate Western-educated young Saudi technocrats equipped to deal effectively with Americans and Europeans. With no language barriers, Yamani was eager to secure expertise in exchange for access to the lucrative and strategically important oil of the Arabian Gulf. While oil revenues were needed for development, Saudi Arabia's leaders were also concerned about the effects of rapid economic change on the values of a conservative Muslim society.

Heir apparent Faisal, who was then virtually running the Saudi government under his older brother King Saud even before he was crowned in 1964, was a strong supporter of Yamani. Identified as one of the king's men, Yamani was entrusted the key post of minister of petroleum and mineral resources in 1962. As minister of petroleum, he took his place as a director of the Arabian American Oil Company (Aramco), originally a consortium of four American oil companies operating in Saudi Arabia under a concession agreement, and over the years worked tirelessly to acquire the firm. Beginning in 1963 he also served as chairman of the board of directors of the General Petroleum and Minerals Organisation (Petromin), the Saudi government agency responsible for management of energy and mineral resources, and became president of the Supreme Consultative Council for Petroleum and Mineral Resources in 1975. All of these positions ensured detailed and privileged knowledge of the Saudi oil world.

Because King Faisal recognised that he could not squander the nation's resources and needed, therefore, to steer a course between specific political objectives and rapid economic development, he actually believed that oil and politics should be kept separate.

Until mid-1972, the Saudi Arabian monarch maintained a healthy economic relationship between the kingdom and its Western allies as he categorically rejected Egyptian calls to use the oil weapon against Washington. Ties were so close that Yamani proposed a bilateral agreement with Washington whereby the United States would be ensured steady oil supplies at stable prices in return for technology and development assistance. Yamani even suggested that surplus Saudi revenues from oil sales could be invested in downstream oil refining and marketing activities throughout the US.

Though this offer was rejected because Washington feared that such an arrangement might limit its options in the Middle East, the Saudi monarch altered his policy and, for the first time in modern Saudi history, directly linked oil to politics as a looming war threatened the peace and stability of the entire region.

Western folly

In April 1973, Faisal dispatched Yamani to Washington to inform American officials that it was impossible for Riyadh to work against the interests of its Arab neighbours if Washington continued to arm Israel indiscriminately. Yamani, who was accompanied by deputy oil minister Saud Al Faisal, "publicly linked oil and Israel for the first time" as he ruled out an expansion of Saudi production "unless the US [changed] its policy towards Israel". American officials dismissed Saudi warnings because, the assumption went, Saudis would not dare alienate themselves from Western powers that ultimately protected them. What Western analysts failed to note, however, was the reality that Riyadh had a far greater control over oil markets than it did in 1956 or even in 1967.

Moreover, American decision-makers relied on Aramco to provide them with uninterrupted supplies, though Yamani sought to improve Saudi Arabia's posture vis-à-vis the company. When in early 1972, "the chairman of Exxon, on behalf of the Aramco four, contacted president Nixon to see if he'd intervene with King Faisal", the president duly send a note to the monarch. Nixon's message to Faisal was simple: "Yamani is taking an unreasonable position which will ultimately hurt the interests of Saudi Arabia." According to Jeffrey Robinson, the author of a 1988 biography titled Yamani: The Inside Story, Faisal was irritated on receiving such a note from the American head of state and informed Yamani of his displeasure. "Nixon says you are too harsh," Faisal reportedly told Yamani before adding, "No, I am the one who is too harsh."

In the event, Riyadh notified several oil executives that Saudi Arabia would cooperate to reach an agreement, but that "unspecified actions would be taken in case of failure". By August 1973, when Egyptian president Anwar Al Sadat and Syrian president Hafez Al Assad visited King Faisal in Riyadh, the viability of the oil weapon was seriously discussed within the framework of a future war. Faisal accepted the idea even if a future military confrontation threatened to be a lengthy one. The breakout of the October war gave Saudi Arabia and the Arab oil producing states a rare opportunity to use the oil weapon effectively. While the Organisation of Arab Petroleum Exporting Countries (Oapec) did not actually adopt its embargo resolution until October 17, 1973 — two weeks after hostilities were launched on October 6 between Egypt and Israel and in direct response to a massive American military airlift to Israel — its reverberations were felt everywhere. Prices rocketed, which prompted the American secretary of state Henry Kissinger to embark on his infamous "shuttle diplomacy".

According to Yamani, Faisal rejected Kissinger's proposals for a second accord between Egypt and Israel, insisting that the second disengagement be between Israel and Syria. Yamani recalled that a long session of back-and-forth arguments in Riyadh ended without any understanding, when Kissinger reiterated his preferred method — Egypt first then Syria — and Faisal declaring his opposition.

At the height of these negotiations, Yamani argued that Saudi economic growth was directly linked to US energy needs when he stated: "Our priority is to industrialise Saudi Arabia and to diversify its economy. … The need for oil in the US and the need for technological expertise in Saudi Arabia provides a natural starting point towards intensified cooperation aimed at serving the best interests of both countries ... which would reflect not only a marked benefit to our individual economies but also to the world and its stability as a whole."

Eye on the future

Regrettably, Kissinger was not especially interested, focusing instead on political steps. Yamani took the long-term view and revisited the issue in 1975 when he declared: "The security and stability of the oil-producing countries is of the utmost importance not only to the producers themselves but to the world at large. The security of oil supplies, so important to consumer countries is totally dependent on the security and stability of the oil producing states ....

"The countries of the world, be they oil suppliers or consumers, have a common vested interest in the security and continuity of oil supplies. Therefore their cooperation in combating any threat to peace in the Middle East is an absolute and constant necessity."

Over the years, Yamani reaffirmed this view — on how Saudi oil policy was intimately linked to the West — with some consistency, even if he cautioned his audiences. In 1981, for example, he declared that Saudi Arabia was "concerned over the international economy because [of its] interest[s] in it." He further underlined that the kingdom was "temporarily investing its money in the West" and that were the international economy to collapse, Saudi Arabia's own "investments [would] erode away". Yamani concluded by declaring that the "concern over the international economy arose from [Riyadh's] desire to industrialise", something that was not possible "if the international economy" were to collapse.

As the peace process inched forward in the Middle East and the critical role that access to energy sources played in background developments to all negotiations, Saudi behaviour evolved as well. According to Yamani, "if Faisal had lived, I don't think we would have seen the Camp David Agreements. He was so very respected by all the leaders in the Middle East that if he was against something they would not do it. He would go to an Arab summit conference and the minute he took the floor to speak, you could see everyone in the room paying great attention to what he was saying. His opinions were not challenged." Without the presence of such a towering figure, however, and after the major oil price adjustments of 1974, which shifted the patterns of worldwide economic development and planning, Yamani chaired Opec's Long-Term Strategy Committee in its attempts to devise a unified policy to support oil prices and stabilise international markets. This proved to be a very difficult task.

World demand for oil began to fall throughout the early 1980s and, naturally, production tapered. In fact, between 1980 and 1984 the Saudi share of oil production among non-communist nations dropped from 16.5 per cent to 7.6 per cent and Yamani was criticised at home for not fighting for unrestrained production before other Opec countries were able to increase their market shares.

A turning point

By 1985, Saudi production dropped to its lowest level in 20 years, perhaps around three million barrels of oil per day. Yamani responded with a policy of unrestrained Opec oil production, which caused a rapid drop in oil prices, with the unforeseen consequence of a huge budget crisis at home against rising expenditures. King Fahd Bin Abdul Aziz instructed Yamani to increase Saudi Arabia's oil quota at the October 1986 Opec meeting and set the price of oil at $18, both of which Yamani could not secure. Whether the monarch perceived Yamani's failure as insubordination or incompetence was impossible to determine. Still, on October 29, 1986, a brief announcement was made on Saudi television confirming that Yamani was dismissed.

Eloquent and shrewd, Shaikh Ahmad Zaki Yamani was the primary spokesman of the political objectives of the 1973 embargo but his ultimate legacy must be ascribed to his astute shepherding of the kingdom's oil policies under the towering Faisal.

Although he commanded the world's attention throughout the 1970s and 1980s, perhaps for the wrong reasons, Yamani was chiefly interested in securing the strategic value of oil for the Arab world in general and Saudi Arabia in particular. An objective that was accomplished with poise.

Intellectual for whom the country always came first

Ahmad Zaki Yamani was born on June 30, 1930, in Makkah, Saudi Arabia, to Hassan Yamani, a respected Hijazi judge who was the acting Grand Mufti in Indonesia and Malaysia for a period of time. His grandfather was Grand Mufti in Turkey.

One of three children, the young pupil inherited his ancestors' patience and the wisdom permeating a household that was enveloped in legal deliberations. At 17 the young Yamani went to Cairo University where he earned a bachelor's degree in law (License en Droit) in 1952. He then enrolled in New York University (1955) before transferring to the School of Law at Harvard University in Cambridge Massachusetts, from where he graduated with an LLM in 1956.

Though Yamani wished to prepare for a teaching career, he became an adviser of the Saudi Council of Ministers in 1957, while he simultaneously founded and oversaw his own law firm in Jeddah. This was followed in 1960, with an appointment to the Cabinet as a Minister of State, which led to his 1962 designation as Minister of Petroleum and Mineral Resources, a position he kept until 1986.

In the latter capacity, Yamani became the first secretary-general of the Organisation of Petroleum Exporting Countries (Opec), which was created in 1960. A gifted thinker and fluent English speaker, his potential was quickly recognised by King Faisal as Yamani leveraged his growing power by creating technical programmes that allowed Saudis to receive advanced training. Towards that end, he was instrumental in founding the University of Petroleum and Minerals at Dhahran in 1964.

Following in the footsteps of his illustrious predecessor Abdullah Tariki, Yamani played a critical role in purchasing the Arabian American Oil Company (Aramco), which is now known as the Saudi Arabian Oil Company (Saudi Aramco). Aramco was not nationalised, as it is mistakenly assumed, and Yamani saw to it that the purchase price was fair ($1.5 billion in cash and tens of billions in future service fees).

On March 25, 1975, Yamani witnessed the assassination of King Faisal, his mentor and friend. Tragedy followed when on December 20, 1975 he was taken hostage by the pro-Palestinian "terrorist" Carlos (the Jackal), along with several other Opec ministers, during a conference at Opec's Vienna headquarters. Although everyone was released unharmed two days later and while Yamani remained unaffected, the experiences left their impact.

On October 29, 1986, the Saudi government dismissed Yamani from all his positions with no explanation, replacing him with Hisham Nazer. Yamani apparently heard the unsettling news on the radio.

Yamani moved his principal residence to Switzerland in 1988. A year later, he established the Centre for Global Energy Studies in London, which acted as a forum for Opec oil ministers, oil company leaders and representatives of governments and consumers. He also founded and is the chairman of the Al Furqan Islamic Heritage Foundation (1989) whose goal is to document and preserve Islamic written heritage by surveying, imaging, cataloguing, editing and publishing Islamic manuscripts.

Over the years, Yamani was awarded honorary degrees by several institutions, including Nihon University in Japan (1969), Osmania University in India (1975), Leobon University in Austria (1979), and the American Graduate School of Business in Arizona (1979).

Yamani married twice and fathered eight children. His first spouse, Lailah, was from Mosul, Iraq, whom he met in New York. She gave him Mai (1956- ), a respected anthropologist affiliated with the Royal Institute for International Affairs in London, Maha (1959- ), an attorney who earned a law degree from Cambridge University, and Hani (1961- ), the oldest son who received a degree in business administration. Yamani married Tammam Al Anbar on March 23, 1975. She gave him five children: Faisal (1976- ), Sharaf (1977- ), Sarah (1979- ), Arwah (1981- ) and Ahmad (1983- ).

A devout Muslim, Yamani composes Arabic poetry and is frequently solicited by media outlets.

Dr Joseph A. Kéchichian is an author, most recently of Faysal: Saudi Arabia's King for All Seasons (2008).

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