>>The US relationship with Saudi Arabia.
Why is it so powerful and what is it built on?
Now, of course, everybody understands
that it's built on oil.
But why oil and why is it so important?
In order to understand the
US relationship with Saudi Arabia,
we have to understand World War II.
In many ways, the Allies were able to defeat
Nazi Germany because it denied Hitler oil.
In 1941, in what was called
the Hinge of Fate by Winston Churchill,
the future of the western world
really hung in the balance.
Hitler was driving for oil,
which he needed to run both
his Panzer tank units and his air force.
The two major battles that marked the Hinge of Fate,
one is Stalingrad up in Russia.
Hitler was not going for Moscow the way Napoleon had.
He was driving towards the Caspian Sea and oil, Russian oil.
Rommel's Desert Rats was driving towards oil across
North Africa towards Egypt, the Suez Canal,
and wanted to cut Britain off from its oil supplies,
which were in Iran, and came through the Suez Canal.
So the Hinge of Fate were these two battles,
Stalingrad and El Alamein in northern Egypt.
The ability of the Allies to stop Hitler in those two places
in 1941 was the deciding point of the war.
After that, Hitler's Panzer units began to stall
and he didn't have oil.
This is what won World War II for the West
and the lesson was learned by the United States that,
if it wanted to be a world power
and if it wanted to win in a World War III,
which many people thought was going to
break out within years,
they had to dominate oil.
The Persian Gulf was the center of oil.
Of course, the United States is
a major oil-producing country.
The biggest oil-producing country in the world at this time.
But more and more oil was
being discovered in the Middle East.
Iran had become the main source
of oil for the British Empire.
In 1909, '10, '11, the British decided
to convert their coal navy to oil.
And that placed Iran at the center of their interests.
The Anglo-Iranian Oil Company,
later to become BP, British Petroleum,
was very important to Britain.
Saudi Arabia also thought it could find oil
and, in 1930s, American explorers stumbled across oil.
They were looking for water, but they found oil.
After that, Aramco, the Arabian-American Oil Company,
became a fixture of Saudi-US relations.
My father and my family moved to Saudi Arabia in 1958
in order to found the first bank,
any American bank, in Saudi Arabia.
The country, after that, began to boom.
Oil wasn't exported from Saudi Arabia
until after World War II.
In 1946, just to give you an idea
of how poor Saudi Arabia was at the time,
the national budget of Saudi Arabia in 1946
was four million pounds sterling.
And most of that came from gifts from Britain.
Of course, America would eclipse Britain
as a benefactor of Saudi Arabia.
But, ever since that time, the United States has seen
the Persian Gulf as key to its position as a superpower.
Its hold on oil, most of which is
buried under the Persian Gulf...
So its control over the Persian Gulf hegemony,
as political scientists like to call it,
is crucially important.
If one thinks today of China, for example,
a growing power that could
challenge the United States for leadership,
China is completely dependent on foreign energy.
Most of that comes from the Persian Gulf region.
Iran and Saudi Arabia.
So, by controlling the Persian Gulf
and the exit to all that oil outflow,
the United States really has a
choke hold on the Chinese economy.
Were China to attack Taiwan
or make aggressive moves in the South China Sea,
the United States would have
considerable leverage over China
through its control of oil.
So, those are factors that weigh on the US today.
Many Americans say let's get out of the Middle East.
We don't need Middle Eastern oil.
Fracking, the development of more and more
oil fields in the United States
is leading towards a position of independence
for the United States from Saudi and Middle Eastern oil.
It is possible that the United States
could give up the Persian Gulf.
But then who would move in?
It would be China and the Chinese military power.
Or Russian military power.
To protect Saudi Arabia,
to officiate between Iran and the Gulf.
These are some of the reasons why
the United States finds it so difficult
to separate itself from the Middle East.
Why the United States has become
so involved in Middle Eastern wars.
At first, Iran was the center
of US power in the Persian Gulf.
That was under the Shah of Iran,
who was overthrown in 1979.
After 1979, President Carter established
Central Command in Tampa, Florida,
which was organized in order to protect the Persian Gulf
once Iran had moved away from the US.
Special forces were established.
Rapid deployment forces that could
move into the region rapidly.
This security architecture that has been
built up in the Persian Gulf
undergirds the importance of the region
for US interests and US authority
in the international economy.
So long as oil remains the principal fuel
powering modern economies,
the relationship between Saudi Arabia and the Gulf region
and the United States is likely to remain
one of close allies where the two are
intimately involved in each other's affairs.