Oil, Religion, and Leadership Struggle in Saudi Arabia 1964-1979

After deposing his brother Saud in 1964, King Faisal ruled Saudi Arabia until 1975. In that decade, Saudi Arabia became much wealthier. Meanwhile, Arab nationalist states, particularly Egypt and Syria, had twice been defeated by Israel. As a result, Saudi Arabia became much more important internationally, and its religious ideology provided a striking alternative to secular nationalism.

Inside Saudi Arabia, undercurrents of opposition grew. It came from within the ruling family (including the sons of former King Saud), Shia inhabitants in the east of the country and Islamists. The latter shared their ideology with the government but characterised the House of Saud as corrupt and hypocritical.

They regarded the Al Saud rulers as very much dominated by the United States and betraying the Palestinian cause. While oil wealth underpinned the Saudi regime and tied it to the western bloc, demands to support the Palestinians conflicted with that.

Saudi Arabia, a major oil producer, was a leading member of the Organisation of Petroleum Exporting Countries (OPEC), which represented about 50 per cent of world production at the time. In the early 1970s, members of OPEC wanted to increase their state incomes by raising the oil price. Iran, a US ally, sought to fund the ‘White Revolution‘ – the Shah’s plan to turn Iran into the fifth industrial power in the world by 2001.

In Venezuela, the government of Carlos Andres Perez had similar aims. Even the US government supported a general rise in the oil price, to increase the earnings from local US production. Neither Iran nor Venezuela had much interest in the Palestinian cause. But Arab public opinion certainly did – there was a wide public demand to use the ‘oil weapon’ to persuade the consuming countries to lessen their support for Israel.

Saudi oil policy was managed by Ahmed Zaki Yamani, a Western-educated lawyer. Yamani became minister of Petroleum and Mineral Resources in 1962 and served under four Saudi monarchs until 1986. He came from a family of prominent religious scholars, but was in no way part of the Al Saud family.

He aimed at Saudi control over oil resources and state jurisdiction over Aramco, founded the General Petroleum and Mineral Organization (Petromin) that was designed to become the national oil company and, in 1964, established the College of Petroleum and Minerals (the current King Fahd University of Petroleum and Minerals) to create a Saudi technocracy.

In the lead-up to the June War in 1967, Saudi public opinion was conspicuously anti-American. There were bomb attacks on the US embassy and military facilities. Yamani warned Aramco that US support for Israel might mean nationalisation.

On the second day of the war, there were demonstrations in Saudi Arabia and workers’ strikes shut down Aramco. King Faisal said oil supplies should be cut off and Yamani banned shipments to the United States and Britain. The US, Venezuela, Iran and Indonesia replaced the shortfall.

Saudi Arabia dominated the market after the war, because oil demand outstripped US production. Saudi Arabia was a “swing producer,” meaning it had so much spare capacity it could force price rises by cutting back production. Yamani stuck to the economic objective of greater Saudi control through participation rather than nationalisation. In 1972, the Saudi government bought a 25 per cent stake in Aramco.

Similar tensions preceded the October War of 1973. In May 1973, King Faisal again warned Aramco that US policy jeopardised the oil concessions; in August 1973 he threatened to use the oil weapon.

The war began while an OPEC meeting was taking place and oil ministers imposed an immediate unilateral 70 per cent hike. Then, on October 17, Arab oil ministers agreed on a 5 per cent production cut per month. This did not deter the US government from announcing a big US military aid package to Israel.

After the cease-fire between Egypt and Israel on 26 October, the oil embargo remained in place. By December the supply of oil available on world markets had dropped by 14 per cent compared to the figure two months earlier. In mid-December, the oil price was 600 per cent higher than it had been on 15 October.

On 22 December, Gulf producers met in Tehran. OPEC’s Economic Commission still sought higher prices, but Saudi Arabia was nervous about causing a depression. King Faisal wanted to dispel the impression that this was a simple grab for money. Even so, the oil price rose dramatically.

Crude oil price 1970-79. The oil price rose sharply after the October War of 1973 after which the price stabilised.

While US President Nixon was paralysed by the Watergate scandal, Henry Kissinger, his Secretary of State, engaged in shuttle diplomacy between Egypt, Israel, Syria, and Saudi Arabia. After the resulting Egypt-Israel disengagement agreement in September 1975, Saudi Arabia and most other Arab producers ended the embargo.

Saudi Arabia agreed to provide Egypt subsidies worth $200 million a year. It bought French Mirage fighter jets for the Egyptian air force to replace Soviet military technology and offered low-interest loans to Egypt.

The Europeans and Americans had already started looking for oil supplies outside the grasp of OPEC. Between 1967 and the end of 1971, huge oil fields were discovered in Alaska (Prudhoe Bay) and the North Sea (Ekofisk, the Forties and Brent fields).

Several years passed before any of this new oil could come onto the market, and in the meantime, huge payments flowed into Saudi coffers. The price of oil remained high and the returns to Saudi Arabia were enormous, especially after the government increased its holding in Aramco to 60 per cent in 1974.

All this wealth enabled King Faisal to seize the political initiative among the Muslim countries, following the defeats of the Arab nationalist states in 1967 and 1973. It began an international development campaign to win support. By 1975, Saudi Arabia was providing $1.99 billion in development assistance to developing countries (in that year Germany provided $1.69 billion, France $2.09 billion and Britain $910 million).

Huge amounts of money were also invested in exporting the Saudi interpretation of Islam to other Muslim countries. This radicalised Islamic movements in the receiving countries and made Saudi leadership of Islam a counterweight to the secularism of Egypt and Iraq. By doing so, it legitimised the regime at home.

According to As’ad Abdullah in his book “The Battle for Saudi Arabia” (2004), Saudi spending on religious propaganda increased dramatically, from about 2.5 million Saudi riyals in 1975 to over 25 million riyals in 1981.

Inside Saudi Arabia, King Faisal hoped to win public legitimacy and buy support with economic development, price controls, free education and health. The oil economy underpinned remarkable social change.

The number of doctors increased from 1 to every 16,370 people in 1960 to one doctor for every 1,700 people in 1977, and the number of children in primary school from 12 per cent of the age group in 1960 to 59 per cent in 1978 (source of figures: World Development Report 1981, p.176,178,190). Urbanisation increased rapidly: by the late 1960s the urban population was growing by over 8% a year.

This created a huge demand for labour local citizens could not fill, so the state encouraged labour migration from Arab countries and further afield in the developing world. They provided a workforce for construction (mainly single men) and domestic service (mainly women), but also professionals such as teachers and doctors.

Because these migrants had no hopes of permanent settlement in Saudi Arabia, they sent most of their earnings back to their home countries. This was a local working class without roots, with loyalties outside the country.

The Saudi religious establishment argued that the foreign workers and the material and cultural goods imported from abroad loosened moral values and weakened religiosity. To bring this conservative establishment under control, King Faisal began a programme of limiting the powers of the religious establishment while simultaneously emphasising its prestige.

When Faisal was prime minister under his brother King Saud in 1962, he had drawn up a reform programme that anchored Saudi law in the Koran and at the same time modernised its organisation. He set up a ministry for justice with supposedly independent courts, but he also established an advisory council of lawyers and scholars chosen by the government to validate government policy by issuing fatwas (legal opinions) based on Islamic law.

Finally, he reformed and strengthened the Committee for the Promotion of Virtue and the Prevention of Vice (also known as the ‘religious police’). All this provoked some opposition among the ulama and changes were only put into effect in 1969. Meanwhile, the ulama protected their religious authority by taking control of education.

Religious conservatism extended beyond the (senior) ulama, and included Islamists, politicised immigrants, discontented Shia and disaffected members of the Al Saud. Parts of Faisal’s modernisation programme caused widespread public opposition. Islamic radicals took it upon themselves to police (what they regarded as) breaches of morality without relying on government officials.

They were responsible for isolated acts of vandalism against businesses that displeased them, such as women’s clothing stores and photographic studios. Some ulama objected to the introduction of television because it projected the human image.

A neo-Ikhwan movement emerged, whose male members grew long beards and adopted the clothing typical of the original Ikhwan suppressed by Ibn Saud. In September 1965, a group of neo-Ikhwan attacked the television station in Riyadh. Among them was a nephew of the king, Khalid bin Musaid bin Abdelaziz, who was shot dead by the police. The television service began in 1967, nonetheless.

In 1966, a group called al-Jamaa al-Salafiya al-Muhtasiba (JSM; roughly: the Salafi Group for Ensuring Virtuous Conduct), was established in Medina. JSM proposed to take the place of the Committee for the Promotion of Virtue and the Prevention of Vice. Over the next ten years, it spread across Saudi Arabia.

At first, it was not overtly political and concentrated more on social issues. One of its founders was Juhayman al-Otaibi, the grandson of an Ikhwan warrior who was among those repressed in 1929-30. Al-Otaibi had been a member of the National Guard and a student at the Islamic University of Medina.

From the 1950s onwards, Saudi Arabia gave political asylum to members of the Muslim Brotherhood who fled Nasser’s Egypt. The reasoning behind this was twofold. Saudi Arabia needed well-trained professionals in the administration and particularly in education.

In addition, members of the Muslim Brotherhood were a useful political weapon against the Saudis’ Egyptian and Baathist rivals. Among the refugees from Egypt was Muhammad Qutb, the younger brother of Sayyid Qutb, the intellectual leader of the Brotherhood who was hanged in Egypt in 1966. Muhammad became a university lecturer in Saudi Arabia.

The partial failure of King Faisal’s modernisation policy led to opposition from a third group, in the eastern Saudi provinces of al-Qatif and al-Hasa, where modern cities like Dammam, al-Khobar, and Dhahran developed to service the oil fields. While in these cities the administration and business sectors prospered, and facilities such as health, water supply and sewage profited from major investments, rural areas and villages were left behind.

The underdeveloped agricultural economy in those areas relied on oases where the water level dropped and unmanaged sewage and rising levels of salt polluted supplies, even drinking water. Much of the housing stock was dilapidated. The population of these two provinces was majority Shia – about 95% in al-Qatif and about 50% in al-Hasa, largely in the poorer areas.

Shia Islam was marginalised by the Sunni-led government and the Saudi state prohibited the construction of Shia mosques. In the early 1970s, some educated Shia citizens left to study abroad, mainly in Iraq and then in Kuwait. When some of them returned by 1975, they set up the Shia Reform Movement.

King Faisal, a personally devout Muslim, issued a proclamation warning Saudi youth about the dangers of lax behaviour and un-Islamic dress. He decreed that during daily prayer times, no one was to work and that girls aged more than nine years should wear the veil. Despite his cultural and social innovations, the King had no intention of liberalising the political system.

The idea of the ‘Free Princes Movement’ led by Talal bin Abdulaziz Al Saud of a constitution, already propagated during King Saud’s time, was anathema. In 1966 Faisal declared that “The Koran is the oldest and most efficient constitution in the world”. Some opposition from within the family was bought off: some 4,000 princes got top civilian and military jobs blending in with the commercial elite that included big families like the Mahfouz and the Bin Ladens.

In March 1975, Faisal bin Musaid bin Abdulaziz, the King’s twenty-six-year-old nephew assassinated King Faisal at a public reception. The motive has never been established conclusively, but it has been widely suggested that it was personal revenge for the police shooting his elder brother Khalid outside the television centre in 1965.

The new king, Khalid, was elderly and pious and preferred slower industrialisation and greater emphasis on Wahhabi doctrine. On the contrary, Prince Abdullah, the head of the National Guard, Crown Prince Fahd and Prince Sultan, who controlled the Defence ministry, sought swifter development and closer ties with the United States. This marked the rise to dominance of a branch of the royal family known as the Sudairis, sons of Ibn Saud and his wife Hassa bint Ahmad bin Mohammed al-Sudairi.

Meanwhile, the oil market was changing. In 1976, the Saudi government took a 100 per cent share in Aramco. However, a long-term effect of the rising oil price was becoming clear: production was shifting away from the OPEC countries. Production began in the UK’s Brent field in 1976, and the Alaska Pipeline in the United States opened in 1977.

For the moment this did not matter because the price of crude increased (albeit slowly) and world consumption of oil continued to rise. Yet, in some industrialised countries, consumption fell as they entered recession.

A more immediate threat to the Saudi government was the contradiction between its alliance with the United States and its aim to lead the Arab and Muslim countries. In 1978, the Camp David Accords between Israel and Egypt made this plain.

They laid the basis for a peace treaty, but the general international jubilation was not shared in Arab countries where it was almost universally seen as a betrayal of the Palestinians, destroying Arab unity. The resulting Arab summit in Baghdad in November 1978 froze Egyptian membership of the Arab League, a position that King Fahd endorsed despite pressure from the United States.

At home, the religious probity of a government that shared ideological ground with the growing religious opposition, and imposed more restrictive social rules, was undermined by the dissolute behaviour of some of the princes. After 1977, Juhayman’s Ikhwan group became more radical.

Its tightly organised community withdrew to the desert, where Juhayman wrote a series of articles known as “The Seven Letters of Juhayman” and composed religious poetry. These writings carried a messianic message about the appearance of a Mahdi, a Muslim spiritual leader who would re-establish justice in the world, and open the way for the last judgement.

In this case, Juhayman’s brother-in-law, Muhammad bin Abdullah al-Qahtani was identified as the new Mahdi. The following year, 1979, was 1400 in the Islamic calendar and tumultuous for Saudi Arabia.

Officials in the White House were extremely critical when Saudi Arabia broke off diplomatic relations with Egypt after the peace treaty with Israel in March 1979. Yet, Saudi Arabia still needed the alliance. In January 1979, the revolution in Iran triumphed and the Shah went into exile. The Saudi government – which had no liking for the Shah – saw Soviet subversion behind the fall of the Iranian monarchy.

That belief was strengthened by the Soviet invasion of Afghanistan in December 1979. The Saudi relationship with the US was pulled in two directions – the need to secure support against the USSR and the need to back the Palestinian cause. These external strains were accompanied by a serious challenge to the Saudi state as a new Islamic century began in November 1979.

On 20 November 1979, New Year’s Day in the Islamic calendar, Juhayman al-Otaibi and about 400 men seized control of the Grand Mosque of Mecca and took thousands of pilgrims hostage. The mosque was not well guarded at the time, because it was a place where any violence was forbidden. They were hard to suppress.

Thirty leading ulama issued a fatwa authorising the use of force to remove the rebels, but it took several weeks before Saudi troops (helped by French advisors) could remove all the rebels from the Great Mosque. In January 1980, the state publicly beheaded 63 people in various parts of the kingdom