Ahmed Zaki Yamani, Who Helped Lead 1973 Oil Embargo, Dies
(Bloomberg) -- Sheikh Ahmed Zaki Yamani, the former Saudi Arabian energy minister who helped direct the 1973 oil embargo and was later kidnapped by Carlos the Jackal, has died. He was 90.
He passed away in London and will be buried in Islam’s holiest city of Mecca, state-run Ekhbariya TV reported.
Yamani, along with counterparts in other Arab oil exporters and Iran, managed a series of production cuts in 1973 and halted supplies to the U.S. and other Western countries. The embargo, which caused an international crisis after oil prices spiked, was a response to Washington’s support for Israel in the Yom Kippur war against Egypt and Syria. It coincided with successful efforts by petrostates to wrest control of their resources from international companies and marked Saudi Arabia’s emergence as a leading power in the oil world.
Harvard-educated Yamani, who spoke English and French as well as Arabic, was dismissed by King Fahd in 1986, by which time crude prices had dropped to record lows. He had held the position for 24 years, making him the longest-serving oil minister in OPEC.
He was “the leading light in OPEC during his eventful years as oil minister,” OPEC Secretary-General Mohammad Barkindo said to Bloomberg. “He was a very patient listener at our meetings. But once he spoke, every one paid attention with pin-drop silence. He was charismatic, with eloquence, yet humble and deeply religious.”
He was also famous for comments that now look prescient as oil producers contemplate the transition away from fossil fuels. “The Stone Age didn’t end for lack of stone, and the Oil Age will end long before the world runs out of oil,” he said.
Realizing that charging too much for crude could dislodge it as the world’s main source of fuel, Yamani sought to balance Saudi Arabia’s desire for steady income with pressure from nations such as Libya and Venezuela to ratchet up prices.
As of February 2021, oil is still in abundant supply and Saudi Arabia is the world’s largest exporter. But governments and companies are ramping up investments in cleaner energies such as solar, wind and hydrogen to prevent global warming. BP Plc said last year that demand for oil may have already peaked.
Yamani represented four Saudi kings at the Organization of Petroleum Exporting Countries, a position that made him the nation’s most powerful commoner. During the 1970s, the group’s members tightened their hold over domestic resources and increased their take of profit from crude sales at the expense of foreign companies, most of them American and European, that had developed the assets.
“The 1970s were the years of real progress,” Alirio Parra, Venezuela’s oil minister in the early 1990s and who died in 2018, said. “That was the period when OPEC and the producing countries gained control over the industry. We have to give credit, where credit is due, to one man -- Ahmed Zaki Yamani.”
On Dec. 21, 1975, Yamani was among the 11 OPEC ministers taken hostage in Vienna, where the cartel is based, by Ilich Ramirez Sanchez, the Venezuelan terrorist better known as Carlos the Jackal.
“Carlos and me, we were talking, joking and so on,” Yamani told Al Jazeera television in 2013. “I mean, he was very kind to me, but he told me he was going to kill me.”
Yamani and Jamshid Amouzegar, his Iranian counterpart, were the last hostages to be released in Algiers, Algeria, where they’d been flown.
Back home, Yamani oversaw the nationalization of what was to become the state oil company, Saudi Aramco. U.S. firms had been running production in the kingdom since Standard Oil of California signed the first concession in May 1933. The Saudi government bought 25% of the local company in 1972 and increased its holding to 60% the next year. It took total control of Saudi Aramco in 1980.
Aramco’s now listed on the Riyadh stock exchange and has the largest market capitalization of any firm, bar Apple Inc.
By the 1980s, OPEC’s policies had helped push major oil importers such as the U.S. and Europe to become more energy-efficient and to search for new sources of hydrocarbons.
“I was against increasing the price of oil, and they attacked me for that,” Yamani told Al Jazeera, referring to other OPEC members. “When you raise the price of oil, you enable the oil companies to use the extra money to explore for oil, and this is what happened in the North Sea, in Mexico and elsewhere. So the level of production outside OPEC took place, competing with the price of OPEC.”
After completing his tenure, Yamani founded the London-based Centre for Global Energy Studies, which provided analysis and consulting services for around 25 years from 1990.
Born on June 30, 1930 in Mecca, Yamani attended both secular and Islamic schools. He graduated from Cairo’s King Fuad I University in 1951 before earning two master’s degrees in law, one from New York University in 1955 and another from Harvard University in 1956.
Returning to Saudi Arabia, he founded the country’s first law firm and worked as a legal adviser to the kingdom on taxes as well as oil and minerals. He became oil minister in 1962. The following year, he set up the University of Petroleum and Minerals in the eastern city of Dhahran.
In 1982 he founded Investcorp, a private equity group based in Bahrain, along with others including Mana Saeed Al-Otaiba, who was oil minister of the United Arab Emirates at the time, and Iraqi financier Nemir Kirdar. Investcorp became the largest firm of its kind in the Middle East, with assets of around $35 billion, and backed companies including Tiffany & Co. and Gucci Ltd.
Later in life, Yamani established foundations for the preservation and publication of old Arabic and Islamic manuscripts.
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