Ahmad Zaki Yamani

Saudi Arabian diplomat

• Born: June 30, 1930
• Birthplace: Mecca, Saudi Arabia
• Died: February 23, 2021
• Place of death: London, United Kingdom

Between 1962 and 1986, Yamani was the best-known spokesperson for Middle Eastern oil-producing countries’ interests in OPEC. He built a considerable reputation as a moderate interested in reconciling strong nationalist demands among producers and the expectations of Western industrialist consuming countries.

Early Life

Ahmad Zaki Yamani (AH-mahd ZAHK-ee yah-MAHN-ee) was born in Mecca, Saudi Arabia. The Yamani family name derives from its probable origin among the tribes of southern Arabia, or the Yemen. Genealogically the family descends from the Hashemite clan within the Quraysh tribe. The Hashemite clan is especially important in Islamic tradition, having been the clan of the Prophet Muhammad.

Yamani’s father was at the time of his birth qadi, or chief judge, of the Islamic supreme court of the Hejaz district of the new Saudi kingdom. This post represented a continuation of a long family tradition: Yamani’s grandfather had been a grand mufti, or jurisprudent, in the late Ottoman Turkish period (to 1914). During the early years of Yamani’s childhood, his father was absent from the family home, serving as grand mufti in Indonesia. Later, he filled the same prestigious post in Malaysia.

The young Yamani received his early education in Mecca. When he was seventeen years old, his father sent him to study law, not at the Azhar, which was the main institution of learning in Islamic subjects, but at the law faculty of the University of Cairo in Egypt. Yamani was so successful in his study of law that the Saudi government awarded him a scholarship to study at New York University’s Comparative Law Institute. It was during his stay in New York that Yamani met and married his first wife, Laila Faidhi, a PhD student in education at New York University and daughter of a well-known Iraqi author and lawyer.

After earning his MA in comparative jurisprudence, Yamani, with his wife, spent a year at Harvard Law School, where he focused his studies on international legal dimensions of capital investment. This led to a second American master’s degree.

Yamani returned to Saudi Arabia in 1956, after nine years of study abroad. He briefly pursued his interest in Islamic law by becoming a teacher but was soon appointed to his first governmental post in the ministry of finance’s newly formed department of zakat (religious alms tax) and income tax. The same year he started his own law firm, Ahmed Zaki Yamani Lawyers & Legal Consultants, in Jeddah, specializing in government-related consultations; it was the first Saudi law firm of its kind. Within a year, the first child of the Yamani family, daughter Mai, was born. A second daughter, Maha, followed in 1959. Their son, Hani, was born in 1961.

Life’s Work

Yamani’s exposure to technical questions relating to the Saudi petroleum industry began even while he was an official in the ministry of finance. In 1957, the controversial director of the Saudi Office of Petroleum and Minerals (Petromin), Abdullah Tariki, called upon Yamani to draft complicated oil exploration contracts, most notably the one governing Japanese offshore concessions. His skillful work attracted the attention of Crown Prince Faisal, who summoned him to his personal residence. Yamani’s biographers have suggested that Faisal already had an important political strategy in mind: to replace the rather brash Abdullah Tariki, who had pioneered successful Saudi renegotiation of the internationally dominant Arabian American Oil Company (ARAMCO) concession, with the calm and professional lawyer Yamani.

Following the creation of the Organization of Petroleum Exporting Countries (OPEC) in 1960, Faisal’s preference for Yamani took on concrete form. In March 1962, Yamani was appointed minister for petroleum. One of the major internal development projects Yamani would support soon after becoming minister was Saudi Arabia’s unique University of Petroleum and Minerals in the “oil capital” at Dhahran. This specialized school had been set up with the cooperation of American professors who designed a curriculum based on engineering, science, and industrial management.

Beyond these types of supportive activities, Yamani’s reputation as a moderate but determined representative of Saudi Arabian oil interests came to the fore in the late 1960s. Particularly after the 1967 Arab-Israeli War, world attention focused on the Middle Eastern members of OPEC to see if an effort would be made to use oil exports as a political weapon. Following the January 1971 Tehran meeting of OPEC after an organization-wide call for a 55 percent tax on foreign concessionaires’ production profits and a uniform price increase, Yamani’s role became key. After a crisis was averted by compromising on a five-year interim tax of 35 percent, OPEC raised the ante, demanding either direct participation by each exporting country in the total operations of the companies or nationalization (Libya’s solution in mid-1971). When ARAMCO tried to strike a bilateral deal with Saudi Arabia that would put other OPEC members at a disadvantage, Yamani refused to cooperate: within a short time, 20 percent participation, based on Saudi Arabian compromises, became standard among the moderates. Saudi Arabia held the line even after Iraq’s nationalization of the British-controlled Iraq Petroleum Company, offering another compromise: an immediate adjustment to 25 percent participation, to rise to 51 percent in stages by 1982.

Even then, there was clear dissatisfaction among some OPEC members, who suspected that Yamani’s moderation spelled a willingness to cooperate with Western oil consumers. This view was dispelled at the time of the October 1973 Middle East War and the Saudi-backed Arab decision to impose an oil embargo on supporters of Israel. In this matter, Yamani took the lead in condemning the West, including the United States. In an interview with Newsweek in December of that year, Yamani indicated that he was not opposed to cooperation with Washington and the oil companies but expected some concrete signs of U.S aid in making Israel compromise politically and militarily. He even went so far as to open splits in the oil consuming world by offering to deal separately with “preferred” importers, especially Japan.

On the whole, however, Yamani came out of the petroleum turmoil of the mid- to late 1970s with his moderate image intact. This was in part a result of the fact that the Saudi Arabian oil giant, under Yamani’s guidance, frequently found itself offsetting (by increasing its own share of world production, thus easing supply and demand pressures) the extreme inflationary price demands of the Iranian oil giant across the Persian Gulf. In an OPEC meeting in late 1976, for example, Yamani made a special trip back to Riyadh to obtain Crown Prince Fahd’s agreement that no matter what Iran’s extreme increase demands might be, Saudi Arabia and the United Arab Emirates (representing 40 percent of OPEC production) would keep their price more than a dollar under other members. Experts looking back on the oil price bonanza to 1980 suggest that had it not been for Yamani’s moderating influence, the price per barrel would have been in the fifty dollar range, at least ten dollars over the peak reached before trends went in the other direction.

The period between 1976 and 1986, the year of Yamani’s dismissal as oil minister, was anything but a calm and secure one for Yamani. First, he would be personally affected by the chaotic politics of the Palestine-Israel conflict: in December 1975, he and a number of other oil negotiators narrowly escaped death when terrorists captured their plane following an OPEC meeting in Vienna. Even before these events, however, a less dramatic but ultimately more definitive source of turmoil in the next ten years of his career occurred. On March 23, Yamani married his second wife, Tammam al-Anbar, daughter of a former Saudi Arabian ambassador; they would have five children. Two days later, King Faisal was assassinated. Although King Khālid occupied the throne for the next few years, Crown Prince Fahd began to demonstrate his opposition to Yamani’s obvious dominance in making Saudi Arabian oil policy.

After Khālid's death in 1982, and during the first few years of Fahd’s reign, the oil price boom was over, making it essential for OPEC’s members to readjust. Readjustments had to do not only with relations with oil consumers but also with internal budgets that had become immensely inflated and dependent on continued high levels of revenue from oil. By October 1986, King Fahd’s disagreements with his oil minister, especially following a clash between the Iranian and Saudi Arabian delegates to an OPEC summit in Geneva, led to Yamani’s dismissal after twenty-four years in office.

Even before leaving the government, Yamani had broadened his business interests. In 1982 he founded the private equity firm Investcorp; it invested in such businesses as Tiffany & Co. and the Swiss watch manufacturer Brequet. Yamani became the majority stockholder of another watchmaking company, Wacheron Constatin, in 1987, overseeing its production of luxury timepieces until he sold his shares in 1996. In 1990 he established the Centre for Global Energy Studies, which offers analyses and publications on the oil market and has numbered on its board of directors several former heads of government. Meanwhile, his law firm, staffed by Saudi, Arab, and American lawyers specializing in international law and business, expanded its business enough to support new offices in Riyadh, the Saudi capital, and Bahrain.

Yamani also invested in public-service organizations. The Al-Furqan Islamic Heritage Foundation, part of the Yamani Cultural and Charitable Foundation, is headquartered in London. It catalogues and preserves Islamic books and manuscripts, editing and publishing works on jurisprudence, philosophy, science, and literature.

Significance

When King Fahd died in August 2005, rumors circulated that his successor, King Abdullah, might bring Yamani back into the government in his old post of oil minister, but Yamani’s law firm discounted the possibility, and no appointment was made. The rumor testified, however, to Yamani’s continuing prestige. Indeed, his long tenure as oil minister assumed the proportions of legend. In 2007, for example, former Russian prime minister Yegor Gaidar attributed the end of the Cold War not to US president Ronald Reagan’s policies but to Yamani’s influence in sharply increasing oil production in 1985 and the corresponding decline in prices.

During the first years of the twenty-first century, however, Yamani consistently argued that OPEC should not cut oil production to shore up prices, and in 2005 he called upon Saudi Arabia to increase production and ship oil to the United States to lower the per-barrel price of crude oil from fifty dollars to the thirty-dollar range. He insisted that in the long run such a policy would sustain the world economy and prove better for OPEC. At the same time he dismissed worries about oil shortages. He said in 2000, “The Stone Age did not come to an end because we had a lack of stones, and the oil age will not come to an end because we have a lack of oil.”

Yamani represented, like Egyptian president Anwar el-Sadat, a familiar face and symbol of apparent rationalism in the troubled late twentieth-century scenario of Middle East politics. In part this stemmed from his relaxed, technocratic style, which allowed him to engage Western diplomats and politicians in a way that did not alienate them. Former US secretary of state Henry Kissinger claimed that Yamani’s negotiating style was conviviality itself; he liked to host banquets, and only after his dignitary guests had dined to satiation would he get down to the business of negotiating.

Lack of overt signs of nationalistic fervor, however, did not mean that Yamani was willing to compromise easily on the critical issue of defending oil as the Middle East’s only, or nearly only, important raw material for export. In short, during his long tenure as Saudi oil minister, he showed again and again that maintaining a political and economic balance in adjusting clashing interests between producers and consumers must be recognized as a necessity in relations between the Middle East and the West.

Bibliography

Bazoobandi, Sara. The Political Economy of the Gulf Sovereign Wealth Funds. New York: Routledge, 2013. Print.

Bronson, Rachel. Thicker Than Oil: America’s Uneasy Partnership with Saudi Arabia. New York: Oxford UP, 2006. Print.

Falola, Toyin, and Ann Genova. The Politics of the Global Oil Industry: An Introduction. Westport: Praeger, 2005. Print.

House, Karen Elliott. On Saudi Arabia: Its People, Past, Religion, Contradictions, and Future. New York: Knopf, 2012. Print.

Kandiyoti, Rafael. Pipelines: Flowing Oil and Crude Politics. London: Tauris, 2012. Print.

Kelly, John B. Arabia, the Gulf, and the West. London: Weidenfeld, 1980. Print.

O’Flaherty, Wendy. “The Man Who Has What Makes the World Go Round.” Maclean’s 26 June 1978: 46–47. Print.

Robinson, Jeffrey. Yamani: The Inside Story. New York: Atlantic Monthly P, 1989. Print.

“Working Hard for Yamani.” New Republic 29 Sept. 1986: 4. Print.