CONCLUSION: THE CLIMATE HEDGE163Saudi Aramco is now evolving into a global “integrated” oil com-
pany in the tradition of the Seven Sisters firms that spawned it. The
giant oil company’s most strategic downstream investments are tak-
ing place outside the kingdom, in countries with the strongest pros-
pects for economic growth and consumer demand. Saudi Aramco is
compiling ownership stakes in as much as 10m b/d of global refinery
capacity. That is an enormous amount, double that held by ExxonMo-
bil, the current top refiner, and roughly equal to all of Saudi Aramco’s
current oil production.^2
Geopolitics has a role in this transformation. Saudi Arabia and its
neighboring monarchies are moving toward a more diverse set of
economic and investment ties with individual companies and coun-
tries. Washington remains paramount, but various forces have eroded
relations with the United States.
One was the end of the Cold War, which took away a strategic ratio-
nale to the US- Saudi relationship that extended beyond oil; the two allies
shared a common interest in countering the atheist and antimonarchy
Soviet Union. US- Saudi cooperation reached its zenith in Afghanistan,
when the mujahedeen drove out the Soviets with plentiful support from
America and its allied kingdom. When the Cold War ended, US- Saudi
relations lost much of their strategic justification.^3
The September 11, 2001, attacks— planned and carried out by a group
of mainly Saudi terrorists— added new stresses to the relationship. These
were compounded by the US response to the attacks: the overthrow of
Saddam Hussein in Iraq, which brought an Iran- friendly, Shia- led gov-
ernment to power. Deterioration in US- Saudi ties accelerated under
President Obama, who openly disdained the relationship, once describ-
ing the Saudis as “our so- called ally.”^4 Obama withdrew US forces from
the region, sympathized openly with Arab Spring protesters in Egypt
and Tunisia, and— to Saudi exasperation— was unwilling to intervene
forcefully in the Syrian civil war. US participation in the successful 2015
Iran negotiations, which eased Western sanctions in exchange for Iran
freezing nuclear development, only furthered tensions.
The shale revolution in the United States has added yet another com-
plication. In just a decade, US oil production nearly doubled, jumping