The United States Saudi Arabia and Oil

When Saudi Arabia and the United States established diplomatic relations in 1933, Standard Oil of California was given a concession to explore for and to produce oil. Oil had been discovered in Iran around 1908 and in Iraq 1904.

In 1938, while searching for water, United States geologists in Saudi Arabia found the largest known source of oil in the world. Needing people who knew how to develop and operate oil fields, U.S. oil companies were invited to Saudi Arabia. The Saudi government was criticized by those who thought inviting foreigners to the kingdom was un-Islamic. The monarchy held on to practicality and set up a joint enterprise with a number of U.S. oil companies. In 1939 oil flowedto a naval oil-tanker, and in 1944 the joint enterprise was renamed the Arabian American Oil Company (Aramco).

During World War II the United States wanted assurance from Saudi Arabia concerning supplies of oil, needed to wage war. In February 1945, following the conference with Stalin and Churchill at Yalta in the Crimea, President Roosevelt and King ibn Saud met aboard a ship docked in the Suez Canal. There, Roosevelt and King Saud concluded a secret agreement in which the U.S. would provide Saudi Arabia military security - military assistance, training and building a military base at Dhahran in Saudi Arabia - in exchange for secure access to supplies of oil.

We need to be sure Saudi Arabia keeps their end of the bargain.