21-05-2025
- Business
- New Indian Express
Gulf trades trigger Texas tremors
'I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.'
— G K Chesterton
As US President Donald Trump concluded his Gulf tour, former President Jimmy Carter's speech on July 15, 1979 couldn't be more relevant: 'I am tonight setting a clear goal for the energy policy of the US. Beginning this moment, this nation will never use more foreign oil than we did in 1977—never.'
The foundation of a long-lasting friendship between the US and the Saudi kingdom was laid on Valentine's Day in 1945, when President Franklin D Roosevelt and King Abdul Aziz Ibn Saud met aboard USS Quincy on the Suez Canal. The bonhomie translated into an arrangement that provided military security to the monarchy and guaranteed oil supplies to the republic. Within three years, a consortium led by Standard Oil Company of California discovered the Ghawar oil field (later to be a part of Saudi Aramco), the world's largest, in the Saudi desert. It heralded the kingdom's undisputed leadership as the largest player in global oil exports, ushering interdependency between the two countries.
In 1977, OPEC provided 85 percent of its crude oil to the US, with Saudi Arabia the single largest source. Against 8.5 million barrels per day of supplies almost five decades back, the figure prognostically remained at 8.44 mbpd in 2024. The Canadian Oil patch currently accounts for more than 60 percent of the US import basket.
Keen to reclaim its share after having ceded it to 'opportunists' within the cartel who erred on quota directives, Saudi Arabia initiated to open the spigots May onwards. Kazakhstan, Iraq and the UAE constantly breached their allocations. Kazakhstan's Tengiz oilfield, the world's sixth largest, is ironically owned and operated as a joint venture between the Kazakh government and American majors Chevron and ExxonMobil, with the latter two together holding 75 percent. Export of nearly 80 percent of Kazakh crude from this oilfield is facilitated by the Russia-controlled Caspian Pipeline Consortium. Such are the complexities of the oil industry, where collaborations flourish sans frontières.
