At the showing of “Crude Awakening,” one item that caused some discussion was the statement that most of the population of Saudi Arabia is poor, in spite of all the wealth that oil has brought to that country. Here, we are more familair with the problems that come with our dependence on imported oil, including the immense wealth that hemmorages out of our country every day. When we hear about Saudis, it’s usually about the fabulously wealthy princes, or Bin Laden and his comrades in jihad, or religious leaders. Just as people around the world typically have a distorted idea about ordinary people in America, we don’t have a good handle on the life of an ordinary person in Saudi Arabia.

I’ve just finished reading “Crude World – The Violent Twilight of Oil,” by Peter Maass. Saudi Arabia was one of the places he went to gather material. Below, I’ve reproduced a few passages that describe the situation of Saudis who are not part of the royal family:

“Saudi Arabia was, at the time [before World War II], one of the poorest nations in the world. largely illiterate and preindustrial, it had meagre exports and minimal relations with the outside world. Imn Saud [the king] rarely ventured outside the country, and hardly any of his few million subjects had done so, except in seasonal migrations with their livestock.” …

“Through the 1950s and 1960s, the American-Saudi relationship remained cosy and sleepy. the extraction of oil rose gradually, under the control of Aramco, a consortium of American companies led by the very fortunate Standard Oil of California (now known as Chevron). with oil costing two or three dollars a barrel, Saudi Arabia had a steady but not extravagant stream of revenue.” …

“In 1973, the colonial era of oil, in which American and European comapanies controlled pricing and distribution, came to an end.” [A brief description of the Arab oil embargo and startling increases in the price of oil and the revenues to the Saudi government follows.] …

“The youth of Saudi Arabia are children of oil. In 1973, the population was six and a half million, but the infusion of postembargo affluence helped fuel a demographic explosion. Baby boom followed baby boom, and the population is now about fout times larger than it was thirty-five years ago.” …

“… Saudi Arabia, even in its boom days, had a severe economic problem. More than 30 percent of Saudi men were jobless, and they were not pleased, because few had a prince’s stipend. … the good jobs – the ones in banking and other well-paying sectors – were out of reach for most Saudis because their education was insufficient. The elite sent their sons and daughters abroad for university and secondary school because the kingdom’s recently formed educational system – its oldest colleges date from the 1950s – produced third-rate graduates whose studies were controlled, until a few years ago, by religious leaders who continue to exert a significant amount of influence.” …

“The crucial thing is not how many barrels of oil a country sells every day, but how many it sells per capita. For example, Kuwait’s exports are one-fifth Saudi Arabia’s but Kuwait’s population is ten times smaller. On a daily basis, Kuwait produces mare than a barrel of oil a day of oil per person, whereas Saudi Arabia produces just about half a barrel. By this measure, Saudi Arabia is not even among the top five petrostates. … in Saudi Arabia, oil revenues are sufficient to enable the royal family to build vast palaces for themselves and impressive highways for the masses, and to tax no one, and to offer education and health care subsidies, but insufficient to underwrite a consistent level of high comfort for all. in the early 1980s, per capita income reached $28,000, which ranked Saudis quite high in the world at the time, but it soon collapsed, along with oil prices, to one-quarter of what it had been – one of the most precipitous drops in national income in the twentieth century. It shot up again in the 2008 boom that pushed oil to nearly $150 a barrel, but then it dropped again as oil prices did. It was a roller coaster.”

Well, that’s quite enough quotes to make the point. Saudi Arabia has an unstable society plagued by high levels of unemployment, an inadequate and ineffective education system and extreme, unjustifiable levels of inequality. Put like that, it sounds all too familiar, even though the Saudis should be getting the benefits of having the greatest reserves of oil in the world.

Peter Maass’ book makes good reading because it’s good journalism. He does have some theories about why things are as they are, but these theories do not get in the way of insightful descriptions of events in the world of oil. He has travelled not just to Saudi Arabia, but to Equador and Venezuela, to Nigeria and Russia, and of course, to Texan and Washington, DC.

I recommend it because it conveys some of the complex reality of the world oil trade on which our economy depends. It’s not everything we should know about oil, because the one book with everything we should know has not been written yet.

Art Myatt

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