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Saudi Arabia: History of Modern Saudi Arabia

by Mitchell G. Bard

Abdul Aziz ibn Saud, a member of the puritanical Muslim Wahhabi sect conquered central Arabia at the beginning of the twentieth century. Ibn Saud stayed neutral during World War I while his rival in the peninsula, Sharif Husain, led the Arab revolt against the Turks in alliance with the British. Afterward, Hussein’s forces were dissipated as many were dispatched with his son Faisal to Damascus. He also found that Britain was less supportive than he’d expected, and he soon found himself vulnerable to attack from ibn Saud.

Over the course of two years, between 1924 and 1926, the Wahhabi forces defeated Husain’s warriors, forced him to abdicate, and proceeded to conquer the principal parts of Arabia. Ibn Saud subsequently tried to move closer to the British — in large measure to protect his kingdom from the possibility of Hussein’s sons, Abdullah and Faisal (who were now rulers themselves of Transjordan and Iraq and British clients), seeking revenge against him. He later signed treaties with the Hashemite brothers.


The fortunes of Saudi Arabia changed dramatically when the Standard Oil Company discovered oil in 1933. The following year, the Texas Company joined the oil drilling and refining operation that took the name Arabian American Oil Company (Aramco). The American companies were given the right to develop a petroleum industry, and the Saudis received much-needed money to bolster their economy during the Great Depression.

Initially, the oil operation was strictly a commercial enterprise, with no U.S. government involvement. The United States did not have any diplomatic representation in the country until World War II. As Nazi Germany began its march through Europe, the economic situation worsened, oil production in Saudi Arabia had to be curtailed, and the major source of income from Muslim pilgrims dried up because few people could travel at that time. Ibn Saud did not view either Japan or Germany as friends and sought help from the United States in the form of a loan to avert the kingdom’s bankruptcy. President Roosevelt agreed to provide a loan to the Saudis through the British. Now the Saudis had cast their lot with the Allies.

After the United States entered the war, it became more urgent to establish bases closer to the European theater, and, in 1943, a secret deal was negotiated to build an air base in Dhahran. The Dhahran base was not completed until after the war, in 1946, and it was enlarged over the years to the point where it is now one of the largest, most sophisticated air bases outside the United States. Americans also were sent to train the Saudi army. This military relationship grew after the war as the United States began to sell military equipment to the Saudis and provide them with financial aid.

The Saudi relationship with the American government became progressively more friendly but hit a speed bump over the question of Palestine. Like other Arab leaders, ibn Saud was vehemently opposed to the creation of a Jewish state and sought to persuade President Roosevelt not to support the Zionists. In a letter written to the king shortly before he died, Roosevelt was noncommittal, saying only that decisions would be made in consultation with both Jews and Arabs.

Money Starts to Flow

Saudi support of the Palestinian cause helped make him popular in the Arab world, but he did not begin to gain wider influence until the 1950s when commercial oil production began to reach significant proportions and Saudi Arabia became second only to Iran among oil producers in the Middle East. Moreover, the income generated by oil sales gradually turned the country from an impoverished nation to one of the wealthiest.

The growing prosperity of the kingdom did not immediately filter down to the masses. Over the years, as the wealth grew, more and more services were provided to the public, especially education and health care; but a wide gap remains to the present day between the average Saudi and the royals, many of whom have become billionaires.

The country was an absolute monarchy that ruled according to rigid Islamic guidelines. Ibn Saud dealt with opposition within the kingdom the old-fashioned way, by marrying members of the royal family off to rival families. This created a huge family of princes and princesses who all had an interest in the perpetuation of the monarchy.

The Saudis were also especially sensitive to foreign influence and rarely allowed outsiders to visit the country unless they were Muslims on pilgrimage. The only Americans typically permitted into the country were diplomats, military officials, and people with direct business interests in the kingdom. Still, the American military presence at Dhahran would become an irritant as many Saudis objected to the degree of U.S. influence on the kingdom and the presence of infidels on their soil. This antagonism would ultimately spawn the al-Qaida terrorist group under the leadership of Osama bin Laden, the son of a billionaire Saudi businessman.

Saudi Arabia was never comfortable with the Pan-Arabism of Nasser and did what it could to frustrate his efforts to unite the Arab states. The most dramatic incident was the revelation that King Saud tried to bribe Syria’s security chief in 1958 to carry out a coup to prevent the union with Egypt.

A New King

The tension with Egypt and the other revolutionary Arab governments, combined with growing dissatisfaction with King Saud’s rule, began to shake the monarchy’s hold on the country. The king was accused of mismanagement and incompetence, and the profligate spending of the royal family had become an embarrassment. The king’s health was also declining.

This combination of circumstances led to a gradual changing of the guard, culminating in the king’s younger brother, Faisal ibn Abdul Aziz, assuming the throne in 1964. Faisal immediately set about modernizing the country, spending the kingdom’s newfound oil revenues to create roads, hospitals, airports, and schools. He also sought to build up the military and began to spend lavish amounts on the most sophisticated weapons he could get, primarily from the United States.

Saudi Arabia sent 20,000 troops to Jordan to participate in the 1967 war and suspended oil shipments to the United States and Britain. Ties were never broken, however, and the oil began to flow again soon after the war. Also, after the war, Saudi Arabia finally reached an agreement with Egypt over Yemen, and the Saudis pledged money to compensate Egypt for revenue lost from the closing of the Suez Canal during the war. The two countries became closer after Sadat took power and changed Egypt’s orientation away from Pan-Arabism and the Soviet Union and toward the West. The Saudis then aided the Egyptian-Syrian war effort in 1973 and declared an oil embargo against the United States, Portugal, and Holland.

Saudi-Egyptian relations soured again after the Israeli-Egyptian peace treaty, with the Saudis cutting off aid and severing diplomatic relations. After Sadat’s assassination, the two countries reconciled.


The Saudis have long pursued a delicate balancing act. They were fiercely anti-communist because the atheism of the Soviet Union conflicted with their Islamic values. The kingdom maintained close relations with the United States but was constantly irritated by the U.S.-Israel relationship. The king was opposed to Pan-Arabism but backed Egypt after it became clear Nasser would not achieve his goals. The Saudis also became financial backers for Palestinian terrorist groups, but they were also uncomfortable with the factions under the PLO umbrella that espoused Marxist principles. Tensions also briefly grew when a Palestinian faction kidnapped the Saudi oil minister and other Arab officials at an OPEC meeting in Vienna in December 1975. (They were later released.)

In March 1975, King Faisal was assassinated by a nephew and was succeeded by Prince Khalid. Khalid, however, was in poor health and his half-brother, Crown Prince Fahd, actually ruled the country. One of Fahd’s principal changes was to assert greater control over Aramco, culminating in the 1980 announcement that the government had taken full control of the company’s assets. With complete control of the nation’s oil industry, and a succession of price hikes through OPEC, the kingdom amassed a huge reserve of money that it began to spend on additional modernization steps within the country, aid to other Arab states, and the terrorists fighting Israel, and, especially, on sophisticated weapons such as American fighter planes and its AWACS radar system.

Arab Threats

The Saudi concern with security was heightened by the Iranian revolution in 1979 and the explicit threat of Khomeini to export his brand of Islam to the Gulf. It was ironic that Khomeini would be hostile toward the Saudis given their puritanical form of Islam. But the Wahhabi sect is viewed as heretical by the Shiites, and the two nations have been longstanding rivals in the region; Iran never directly threatened Saudi Arabia and recently has improved relations.

The more serious threat to the kingdom came just over a decade later when the secular Saddam Hussein's army invaded Kuwait and had his forces in place to move into Saudi Arabia. The United States came to the rescue in 1991 and made clear its commitment to ensuring the kingdom’s survival. The cost of the Gulf War (the Saudis agreed to pay $51 billion to cover American costs), combined with the country’s history of profligate deficit spending, and declining oil prices created an economic crisis that provoked the Saudis to cut spending and secure loans.

The decline in spending on social services, which the Saudi people had come to expect, combined with dissatisfaction weak word over the large American military presence in the country, caused increasing tension in the society and between the American and Saudi governments. This was further exacerbated by the 1995 and June 1996 terrorist attacks against a U.S. barracks at the Dhahran base that killed 19 Americans and wounded more than 300 people. The perpetrators were never found, and U.S. officials complained that the Saudi government would not cooperate in the investigation.

King Fahd suffered a stroke in 1995 and his half-brother, Crown Prince Abdullah, subsequently became the country’s de facto ruler. Under Abdullah, the nation has continued its past policies and sought to strengthen ties with the United States. These were strained, however, by the attack on September 11. Americans were disturbed by the fact that 15 of the 19 hijackers involved in the September 11 attack were Saudis and that Osama bin Laden is also a Saudi. Polls in the kingdom indicate strong support for al-Qaida, and many press stories began to highlight the radical brand of Islam being taught in many Saudi schools, the oppression of women that resembles the treatment of blacks under apartheid in South Africa, and the lack of cooperation the Saudi government was providing to investigators of the terrorist attacks. It was largely in response to the barrage of negative publicity that Abdullah floated his peace initiative in early 2002.

Saudi Arabia and the Jews

In May 2022, the Muslim World League hosted a historic gathering of faith leaders in Riyadh. Among the 12 rabbis in attendance was Rabbi David Rosen from Israel.

We are witnessing a transformation of Muslim-Jewish relations across the globe, said Rosen. It is encouraging and exciting to see the Muslim World League and Saudi Arabia exercise leadership to promote cooperation among the faith communities of the world. The work of forging a multifaith alliance against extremism and hatred of all kinds, including antisemitism, must include traditional religious voices along with more liberal expressions. Every country and faith community has a role to play.

Sources: Mitchell G. Bard, The Complete Idiot's Guide to Middle East Conflict, 4th Edition, (NY: Alpha Books, 2008).
American Jewish Committee Leader Attends Historic Multifaith Gathering in Saudi Arabia, Press Release, American Jewish Committee, (May 12, 2022).