There has been only one handshake in these modern times that has mattered. “Good day everyone.” One handshake that has amassed the wealth and influence, “Thank-you everybody for coming”, the black-eyed Government Minister gives a look to all sides like he is definitely in charge. “Now let’s get started.” Like he is talking beyond just this crowded room, “This day is a first.” This is far from hyperbole that is for damn sure! “A first for the Energy Markets of the World.” On November 27, 2014 the only Partnership that has ever mattered to this modern industrialized world, “And a first for the elasticity of our pricing.” An Eighty year juggernaut reaching into every corner of the Globe, “We are adopting a new policy”, was about to be broken. “The Aramco Corporation has decided on a policy bereft of any limits.” Although maybe ‘shattered’ is less of an exaggeration for those with a cunning eye, for those around the world who know the reverberations that will be felt from such a bold statement. “Bereft of any quotas whatsoever going forward.” The cameras click non-stop as Reporters scribble on notepads. “We will continue to pump.” Bloomberg TV. CNBC. Fox. CNN. BBCMoney. “And pump for anyone who wants to buy our product.” His traditional all-whites, bright and pressed from head-to-toe… reflect a serious tone. “We refuse to continue to subsidize all other Producers of the world.” He looks like he’s speaking directly to somebody. “As a policy for OPEC – and I convinced OPEC of this – even OPEC Secretary General Abdalla Salem al-Badri is now convinced that it is not in the interest of OPEC Producers to cut their production, whatever the price is.”
Everything we eat… drive… everything we live in.
“We are open for business to anybody who wants our product.”
For anyone listening this was the first and last shot fired across the bow.
“Whether it goes down to $20, $40, $50, $60 - it is irrelevant,”
The greatest handshake broke into a million pieces that day; I’m still amazed so few noticed.
Archaeological ruins and ancient texts show handshaking was practiced in Ancient Greece as far back as 5th century BC; a depiction of two soldiers shaking hands can be found on part of a funerary stele on display in the Pergamon Museum in Berlin. A gesture of peace, the handshake demonstrates that the hand holds no weapon.
The U.S. President cements the deal with King Abd al-Aziz with an outstretched hand. Here is that profitable journey.
1932 – Abd al-Aziz ibn Saud declares himself King and gives his name to the country: Saudi Arabia. Every Saudi King since has been a son of Abd al-Aziz ibn Saud. (until today)
1933 – Saudi Arabia and U.S. establish diplomatic relations, subsequently the first foreign oil Prospectors arrive in the Kingdom. Ignoring criticism, King Abd al-Aziz invites U.S companies to develop Saudi oil resources. The Americans pay $170,000 in gold for land concessions that turn out to contain the biggest oil fields on earth.
1934 – American and Saudi Governments set up a joint Enterprise that later becomes the Arabian American Oil Company (Aramco). Its shareholders include America’s four largest oil corporations. Chevron. Exxon. Mobil. Texaco.
1945 – Americans need oil to win the war, and the Saudis need protection from vicious enemies both inside and outside. Docked in the Suez Canal is the USS Quincy… where President Roosevelt signs an oil-for-security pact with the King. 1957 – Egypt’s Nasser overthrows his own Monarchy and declares himself a secular Pan-Arabist. He demands Saudi oil is for all Arabs. Eisenhower & Saud sign a more detailed military pact that exists to this day.
1960 – Chevron, Exxon, Mobil and Texaco become the largest Oil Companies in the World.
1970 – Dhahran military base is expanded considerably (and often over the decades) to protect the growing instability within the Kingdom.
9/11 – 15 of 19 hijackers are revealed as Saudi citizens.
The significance of those statements made by Saudi Oil Minister Ali al-Naimi in front of the world was leaving everyone scratching their heads. How was American fracking to survive?
How was Russia to survive?
How was British Petroleum to survive?
How was Iran to survive? Could Saudi Arabia survive such a drop in revenue and still meet their national expenditures? Could this threaten the Kingdom’s security? Was this the biggest game of chicken ever played? Was it being aimed at American frackers? Russian Oligarchs? Or arch-nemesis Iran? Could the world survive such a game? Thirteen million barrels a day of the lowest cost oil anywhere; it’s their world… we’re just living in it.