The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

The four Aramco partners—Exxon, Mobil, Texaco, and Chevron—though somewhat cutting back, had continued to take large volumes of oil from Saudi Arabia even as they found themselves buying oil at “official prices” and thus at costs much higher than competitive crudes. The fundamental precept had always been to preserve access to Saudi oil, and the companies resisted sundering those links. But in 1983 and 1984, they had to acknowledge reluctantly that the price for access was too high. “Those of us in Chevron always viewed Aramco as our operation,” said George Keller. “It’s something we started, developed, and in which we played a key role. So it was more of a problem. But we couldn’t keep pouring money down a hole. We had to back away, and ultimately we had to tell Yamani that we couldn’t continue to do this.” Though the Aramco links were not broken, they were significantly reduced. Saudi Arabia was no longer the special provider. The alteration in the commercial relationship between the four companies and Saudi Arabia was one of the great symbols of how the oil industry was being transformed. The shift toward the commodity market was facilitated by a major structural change in the industry. With the decontrol of oil prices and the elimination of various other controls, the United States was no longer insulated from the world oil market. Indeed, it now became tightly tied into the rest of the market. The United States was not only the largest single consuming country; as a r...