Riyadh's Relationship with Washington Born of Oil and Politics
On May 29, 1933, King Abdul-Aziz Al Saud signed an oil exploration concession with American company SoCal, marking Washington's first major foothold in the Middle East. The agreement led to the creation of California Arabian Standard Oil Co., or Casoc, which was renamed Aramco in 1944.
The concession resulted from sustained efforts by American businesspeople who pushed US commercial interests into the region. It also set the stage for a deeper political presence and marked the beginning of a relationship between Washington and Riyadh that would last for decades.
On May 1, 1939, oil production began in Dhahran, with King Abdulaziz turning the valve to mark the start of a new economic era. The company provided a lifeline to the kingdom's struggling treasury, paying 200,000 British gold pounds and promising further payments.
However, the king's financial crisis soon took a different turn, driven not by London or the Zionist movement, but by American businessmen. Casoc's managing director, James Moffett, turned to President Franklin Roosevelt for help, proposing that the US provide Saudi Arabia with $6m a year for five years in exchange for discounted oil prices.
Roosevelt initially refused, saying 'that country is very far away,' but eventually agreed to help. The kingdom received aid under the Lend-Lease program and over the next two years, it received an additional $33 million in cash, goods, and gold and silver currency.