Committed to PEOPLE'S RIGHT TO KNOW
Vol. 4 Num 260 Thu. February 19, 2004  
   
Editorial


Chronicle
Of OPEC and Sheikh Zaki Yamani


OPEC became an international spectacle of the first order in the mid 1970s. The eyes of the world fastened on its meetings, with their drama, pomp, and commotion. In the latest meeting held in Algiers on 9-10 February 2004, the Saudis purposefully and forcefully pursued their line against further price increases. The other members of OPEC knew that the Saudis would threaten to push up their production as 'swing producer' to turn the oil market to their favour in the name of price stabilisation. In fact the Saudis had never approved of the scale of the November-December 1973 oil price increase. They thought it was too large, and too dangerous to their own position. They feared the economic consequences. The influence of Sheikh Zaki Yamani was too difficult to ignore. King Faisal approved Yamani's gesture because he feared losing control over OPEC and over the basic decisions about oil, which was so central to the kingdom's existence and future. From those considerations flowed other concerns.

Saudi Arabia, a large country in territory, but small in population, was considered one of the largest oil reserves in the world. There was still another concern: Riyadh-Tehran. Riyadh felt that Reza Shah Pahlevi was too short sighted in his drive for higher oil prices, too fired by his own ambition which was encouraging him to claim hegemony over the Gulf. In August 1975, the US ambassador to Riyadh reported to Washington that Zaki Yamani had said that "the talk of eternal friendship between Iran and the United States was nauseating to him and other Saudis. They knew the Shah was a megalomaniac, that he was highly unstable mentally, and that if we didn't recognise this there must be something wrong with our powers of observation." Yamani sounded a warning, "If the Shah departs from the stage, we could also have a violent, anti-American regime in Tehran." In four years the forecast came true in 1979.

Those who read about the developments of OPEC know well about Sheikh Ahmed Zaki al-Yamani who emerged as one of the shrewdest and most devious oil negotiators in the world. He became 'Mr OPEC.' As such he took the play away from the imperious, tricky Reza Shah of Iran -- and had no qualms about battling him on principles and policy. However, Dr Zaki Yamani had his own ambitions. In all the Saudi manoeuvres, the spotlight fell on Yamani. With his seemingly unblinking brown eyes and his clipped beard, he became familiar the world over as the symbol of the new age of oil. The world sometimes confused his role and ascribed greater power to him than perhaps he had. He was in the final analysis, the representative of Saudi Arabia, albeit an enormously important one. He could not dictate or solely determine Saudi oil policy, but he could shape it. His style of diplomacy, his mastery of analysis and negotiations, and his skill with the press -- all gave him decisive influence. His power was augmented by tenure, the fact that he ended up being 'there' longer than anyone else.

The price of oil in the international arena went very, very high indeed. The light Arabian crude was sold at US$34 per barrel, all time highest. The only oil refinery (Eastern Refinery, Chittagong) in country was dependent light Arabian oil. The government became very concerned. Air Vice Marshall Sultan Mahmud was the Petroleum Minister. Luckily, and coincidentally the minister was invited to visit Saudi Arabia. This was an opportune time to meet Zaki Yamani, he thought. So, in his official delegation Dr Waliuzzaman, Director, Bangladesh Petroleum Corporation, was included. On his return the Hon'ble Minister was describing the outcome and experience. He said, "I was impressed with his disarming, soft manner. Dressed in Arab robes and looking like a twin to great Hollywood filmstar Omar Sharif, he (Yamani) held his pet Pomeranian dog in his lap and talked about the changes in modern Arabia." Dr Yamani told the Bangladeshi minister that he was cautious and calculating, "I can't bear gambling," he said. "Yes, I hate it. It rots the soul. I've never been a gambler. Never." In oil politics, the Bangladesh minister recalled, Yamani, insisted he never gambled. "It's always a calculated risk. Oh, I calculate my risks well. And when I take them, it means I've taken all necessary precautions to reduce then to the minimum possible. Almost to zero." AVM Sultan Mahmud was very happy to have met Dr Sheikh Zaki Yamani and obtain concessions procurement of oil.

While Yamani was widely known as 'Sheikh', the title was, in his case, honorary, assumed by prominent commoners, which he was. Yamani was born in Mecca in 1930, the year King Ibn Saud allowed prospecting for oil and minerals to try and overcome the country's desperate financial situation. During Yamani's childhood, camels still thronged the streets of Mecca. Both his grandfather and father were religious teachers and Islamic lawyers; his father had been grand mufti in the Dutch East Indies and Malaya. This combination of learning and piety shaped Yamani's outlook and intellectual development. Yamani's own considerable intelligence was recognised early in Saudi schools. He went to the University of Cairo, and then to New York University and obtained a doctorate in international law. This was followed by a year at the Harvard Law School, where he studied international law. He also developed an intuitive grasp of the west, of the United State in particular, and of how to communicate and be comfortable with Americans. He wrote the contract for the 1957 concession with Arabian Oil, the Japanese consortium, that broke in on the majors in the Middle East. He became a legal adviser to Saudi Arabia's Income Tax department. Yamani cut his professional teeth on studies of Aramco's tax returns. He was known to be very loyal to King Faisal and shared with him the sense of Saudi Arabia's destiny to resolve the Arab-Israeli conflict.

Earlier, Yamani wrote commentaries on legal issues for various newspapers. That attracted the attention of a most valuable patron, prince Faisal, second son to Ibn Saud. Faisal invited Yamani to become his legal counselor, and in 1962, when Faisal emerged triumphant from the power struggle with his brother Saud, one of his first acts was to fire the nationalist oil minister Abdullah Tariki. Faisal appointed as his successor the thirty-two-year old Yamani, whose initial task, in turn, was to end Tariki's confrontation with Aramco. Yamani did as was expected by Aramco and other international oil companies. By the time of the 1973 oil embargo by OPEC, Yamani had already been oil minister for eleven years and had developed considerable experience and skill, and superb negotiating talents. His voice was soft, forcing adversaries to strain and to be silent to hear what he said. He almost never lost temper; the angrier he got, the more quite he became. His manner of presentation was mesmerisingly irresistible to many, and absolutely infuriating to others. Yamani carefully crafted his mystique; he was the master of patience and of the unblinking stare. When required, he would just look at his interlocutor, without saying a word, until the subject was changed.

Shortly after oil prices were raised so astronomically, Yamani, who was in New York, was invited by a prominent banker to lunch at the prestigious 21 Club. Yamani ordered a hamburger, commenting that he didn't often have a chance to have one. At the luncheon's end to his hosts surprise, Yamani insisted on paying the bill (the American's call it check). When he got it, he said, "You see? Why do you complain about oil at twelve dollars a barrel when a hamburger costs eight fifty?" Incidentally, a big-burger used to cost half a dollar in McDonalds! His hosts refrained from commenting that both Yamani's oil and 21 Club's hamburgers might be artificially overpriced. However, the point Yamani was trying to make highlights a serious grievance of all developing countries. Unless they receive an equitable price for their raw material exports, they cannot hope to pay the constantly inflating prices of the goods they import from the industrialised countries.

In March 1975, Yamani accompanied the visiting Kuwaiti oil minister to an audience with king Faisal. A nephew of Faisal followed the party into the small reception room, and as the Kuwaiti knelt before the king, the nephew stepped forward and fired several bullets into Faisal's head, killing him almost instantaneously. The reason for such a killing remained a mystery!

Yamani was very much a Faisal man, devoted to the king who had chosen him. The king, in turn, regarded Yamani a favoured protege and rewarded him with extensive grants of real estate, which skyrocketed in value during the oil boom. Yamani's close, intense relation with the king gave him carte blanche in making oil policy, though always said to be under the final control of Faisal, and perhaps within lines defined by the Royal family, whose most prominent member, when it came to oil policy, after the king himself was his half brother, Prince Fahad.

In December 1975, the international terrorist known as 'Carlos', from Venezuela, led five other terrorists in an attack on a ministerial meeting in the OPEC building in Vienna. Three people were killed in the first few minutes. The terrorists took the oil ministers hostage, and eventually embarked on a harrowing air journey, flying first to Algiers, then to Tripoli, and then back to Algiers, threatening to kill the ministers. Again and again, they said that Jamshid Amuzegar, the Iranian oil minister and Yamani had been sentenced to death. On the tense flight, Yamani spent the time playing with his worry beads and reciting to himself verses from the Holy Quran, convinced that he would soon be a dead man. Forty-eight hours after the initial assault in Vienna, they were released. Yamani became obsessive on the subject of security thereafter. Fahad later became crown Prince and Deputy Prime Minister, to whom he now reported.

At times, the Saudi policies infuriated the other exporters enough to bring down a rain of vituperations, often carefully directed toward Yamani and not the Royal family. One of the leading newspapers in Tehran castigated Yamani as a "stooge of capital circles, and a traitor not only to his own king and country but also to the Arab world and the third world as a whole". The Iraqi oil minister declared that Yamani was acting in the service of "imperialism and Zionism". To such rhetoric, the unflappable Yamani reacted with his enigmatic smile and unblinking stare.

In September 1986 Harvard University was celebrating its 350th anniversary. To cap the celebration, Harvard had chosen two people to give major speeches. One was prince Charles, heir to the British throne. The other speaker was the Saudi oil minister, Ahmed Zaki Yamani. A month later, in one evening, Yamani was back in Riyahd at a dinner with his friends when he received a phone call advising him to turn on the television news. An item at the end of the broadcast reported tersely and without any adornment that Ahmed Zaki Yamani was 'relieved' of his post as oil minister. That was the way he learned that he had been fired. Yamani had been in the job for twenty-four years. Still, it was an abrupt, embarrassing, and disconcerting end to a quarter-century career. Did he deserve such an end?

Nuruddin Mahmud Kamal is a retired government official.