The Oil Kings: How the U.S., Iran and Saudi Arabia Changed the Balance of Power in the Middle East (review)

This is a fascinating book recounting in great detail the triangular oil relationships among the US, Iran, and Saudi Arabia in the years 1969-1977. The research amassed in writing the book is impressive, including interviews with US policymakers and recently declassified US documents related to the historical period under study. The focus is mainly on US oil policy during this period and most of the contents are seen through the eyes of US policymakers.

The author's thesis is that US policies and their impact during these years changed the balance of power in the Middle East and set the tone for US relations with the Gulf oil producers that have survived to the present day. The key events during that time, as he sees it, are: a) in 1969 the US turned from being major exporter of oil to being a net importer; b) in October 1973 AOPEC imposed an oil embargo that lasted until March 1974; and c) in 1977 a "US-Saudi" oil coup foiled a planned OPEC hike in oil prices led by the Shah of Iran that helped create an Iranian economic crisis and led to the Shah's overthrow in 1979, thus enabling Saudi Arabia to replace Iran as Washington's indispensable ally in the Persian Gulf.

The narrative begins when the Shah, who was in the US attending the funeral of President Dwight D. Eisenhower, cemented close relations, including oil relations, with President Richard Nixon. Probably the most intriguing part of the book, however, is the detailed account of US policymakers' responses to the Arab oil embargo in 1973-1974, and in its wake, its pressuring OPEC countries to maintain moderate oil prices. For the US, this was a highly emotional period of economic as well as political crisis both at home and abroad. The account of US policymaking, based in large part on recently declassified materials, is so vivid it is almost like sitting in with senior policymakers, including Secretary of State Henry Kissinger, Defense Secretary James Schlesinger, and Treasury Secretary William Simon, and listening to the often-heated bureaucratic clashes involving egos, turf, and personal and institutional preferences of how best to respond to the various incompatible issues arising from the soaring oil prices. In particular, the author reveals at length some really absurd policy options and contingency plans pushed by Kissinger.

That said, however, in this reviewer's opinion, the author does not entirely validate his thesis. Most of the book consists of historical descriptive narrative of US policy decision-making and diplomatic relations with Iranian and Saudi counterparts addressing the high oil prices and their impact on US and Western European economies. It does cite some Iranian memoirs quoting the Shah, but nonetheless views developments mainly through US eyes. There is certainly a correlation between the descriptive narrative of US policies and the subsequent events that followed, but correlation and causation are not synonymous, and descriptive narrative alone is not a sufficient basis for establishing causality.

One example of misconstruing causality is the author's conclusion that intense US pressure persuaded the Saudis to raise oil production in 1997 to block another OPEC oil price rise led by Iran. He bases his conclusion on declassified US documents referring to secret US-Saudi discussions in which the Saudis agreed to do so, and labels the successful Saudi act a joint "US-Saudi coup." The fact is that US pressure merely coincided with the Saudis' own economic self-interests in moderating prices. In addition, the Saudis had ambitions to become the "swing producer" in OPEC, in effect becoming the leader in determining the rate of oil production and prices.

Another example is the conclusion that ham-handed US policies throughout the crisis caused much of its severity. US policymaking during the oil crisis was at times indeed ham-handed...