Founded in 1932 by Ibn Saud, who united four regions into the one Kingdom we recognize today, Saudi Arabia is the largest country in the Middle East by area and, with a population of about 30 million people, the fifth-largest Middle Eastern nation by population.
The United States, first through its oil industry and then through government contacts, established a relationship with Saudi Arabia’s founder, King Abdulaziz Ibn Saud, and his successors that evolved into a close alliance. U.S. businesses have been involved in Saudi Arabia’s oil industry since 1933, when the Standard Oil Company of California (now Chevron) won a sixty-year concession to explore eastern Saudi Arabia.
Standard Oil and the Texas Oil Company (Texaco) formed a partnership in Saudi Arabia in 1936 and together founded the Arabian American Oil Company, or Aramco, in 1944, the consortium later expanded to include what would later become Exxon and Mobil, helping Saudi Arabia become one of the world’s largest oil exporters. The US government wanted to protect its companies' investment, especially when America was in dire need of crude during World War II. In 1943, FDR declared the security of Saudi Arabia a "vital interest" of the United States.
U.S. President Franklin D. Roosevelt recognised Saudi’s oil discovery’s strategic nature. In February 1945, Roosevelt met Abdulaziz in person aboard the USS Quincy in Egypt’s Great Bitter Lake. The King and the President hit it off well, despite deep disagreement on the future of Palestine. The two countries date their “special relationship” to this meeting.
During the Cold War, the two shared strong common interests in containing and limiting Soviet influence in the Middle East. During the Reagan Administration, it was the Saudis who helped to make the American strategy of raising the costs to the Soviets in Afghanistan a success. Whether looking to counter the influence of the Soviets or their proxies or preserving a stable oil market after 1973, the US and Saudi Arabia cooperated in the pursuit of their common interests and concerns.
After the Cold War, the Saudis began pushing for a bigger role in ARAMCO — and eventually took it over, though they didn't nationalize it outright until 1980. But they treated their American partners well. They gave the U.S. partners—Chevron, Mobil Exxon, and Texaco—priority in selling them oil, and they offered special discount rates, to please both Washington and the companies. But the US-Saudi alliance deepened even as America's direct role in the Saudi oil sector waned. That's because both countries agreed on what they saw as the dominant Middle East issue of the time: Soviet influence in the region.
The US and Saudi Arabia, allying themselves against this shared enemy, expanded their initial oil relationship into a more expansive security alliance. In 1951, the US and Saudi Arabia established the Mutual Defense Assistance Agreement, the first formal defense agreement between the two nations. It provided for American arms sales to Saudi Arabia and American training of the Saudi military.
The United States had for many years relied on Iran, under the rule of the shah, as part of a “twin pillar” policy of stabilizing the region. However, Iran’s 1979 Islamic Revolution upended that approach, leaving Saudi Arabia as the primary U.S. ally in the region for nearly four decades.
U.S.-Saudi military cooperation peaked in the first Gulf War. The Saudis allowed President Bush to send 500,000 soldiers into the kingdom in order to protect it and liberate Kuwait, because there were doubts whether Saddam was going to stop at Kuwait, which a U.S.-led coalition liberated in 1991. This was not the first time that United States forces had been stationed on Saudi soil. However, the presence of United States and other foreign forces prior to and during the Persian Gulf War was of an unprecedented magnitude. Despite the size of the United States and allied contingents, the military operations ran relatively smoothly. The absence of major logistical problems was due in part to the vast sums that Saudi Arabia had invested over the years to acquire weapons and equipment, construct modern military facilities, and train personnel. After Operation Desert Shield ended, US military presence was reduced to 5,000 troops, reflecting a US commitment to protecting Saudi interests in the region.
After al-Qaeida’s bombings of the American embassies in Kenya and Tanzania in 1998, the Salafi Jihadist issue began to cause tensions in the Saudi-American relationship. With the 9/11 attacks, it became the central issue in the greatest crisis the relationship experienced since inception of the relationship. Yet, a rupture did not happen, for two reasons. First, in 2003 al-Qaeda began a campaign in Saudi Arabia itself against the regime. The 2003 terrorist attacks in Saudi Arabia, more than those of 2001, mobilized the Saudi regime to take an active role in confronting the Salafi jihadist movement. The second reason that the relationship survived the post-9/11 crisis was the perception by leaders in both countries that geopolitical interests necessitated their continued close cooperation.
The relationship between the United States and Saudi Arabia came under unprecedented strains during Barack Obama’s two terms as president amid ongoing strategic disagreements with Riyadh over the Obama administration’s policies in the Middle East – namely the US’s rapprochement with Iran, a Shiite theocracy which that Saudi Arabia views as a growing threat in the region. Tensions reached a new peak in 2015 when Obama stuck a nuclear deal with Tehran, the signature foreign policy achievement of his presidency. The then-new King Salman and his ambitious son Prince Muhammad bin Salman had embarked on Operation Decisive Storm to prevent Houthi rebels aligned with Iran from taking over all of Yemen.
But since Donald Trump’s rise to power as the new president of the US in 2017, the two countries have sought to deeper their ties once again. King Salman enthusiastically greeted Trump’s promise to take a harder line than Obama on Iran. The king summoned Islamic leaders to a summit in Riyadh in May to endorse the Saudi position which sees Iran as the leader of terror, subversion, and mischief in the region.
Saudi Arabia welcomed Trump’s decision in 2018 to withdraw the United States from the international nuclear agreement with Iran, which it called a “flawed agreement”, and to reimpose economic sanctions on Tehran as part of the ‘maximum pressure campaign’ that seeks to squeeze the Iranian economy on the theory that crippling sanctions will force Tehran to choose between its own economic viability and its destabilising activities around the region. Trump had frequently criticised the Iran accord because it does not address Iran’s ballistic missile program and its role in conflicts in Yemen and Syria, its nuclear activities beyond 2025, and the terms under which international inspectors can visit suspect Iranian nuclear sites.
Saudi Arabia is also the top destination for U.S. arms, with U.S. defense sales to the kingdom totaling close to $90 billion since 1950, according to the Pentagon. President Trump has encouraged such deals, arguing that they create half a million American jobs; several major defense firms have made lower projections. Trump authorized a nearly $110B arms deal with Saudi Arabia, worth $300B over a ten-year period, signed on the 20 May 2017, this includes training and close co-operation with the Saudi Arabian military. According to the arms researcher SIPRI, Saudi Arabia’s total arms imports were almost eighteen times greater in 2017 than they were a decade earlier.
Saudi Arabia also signed billions of dollars of deals with U.S. companies in the arms industry and petroleum industry during Trump’s presidency. But the Saudi government officials and businessmen, both royals and commoners, have deep ties to the United States that extend beyond oil to finance and Silicon Valley. Prince Alwaleed bin Talal, an alumnus of Syracuse University, is the kingdom’s most famous billionaire investor and owns stakes in Citigroup, Twitter, and Snap. Saudi Arabia’s sovereign wealth fund has stakes in major U.S. tech firms, including Uber and Tesla.
The U.S.-Saudi Arabia alliance is built on decades of security cooperation and strong business ties dominated by U.S. interests in Saudi oil. The relationship has survived periods of challenges and prosperity, pulling through to a promising future in business and profitability as Saudi Arabia reaches toward an economic and social transformation in the next decade.
