36THE OIL AGE ARRIVESTHE AGE OF THE SEVEN SISTERSOil production in the Gulf and in much of the world was managed by a
group of big Western oil companies known as the Seven Sisters. In Saudi
Arabia, four of the American sisters combined in 1947 to form the
Arabian- American Oil Co., or Aramco.^17 They were Socal and Texaco,
joined by Standard Oil of New Jersey (later Exxon) and Standard Oil of
New York (Mobil). The three remaining “sisters” were Shell (of Dutch-
British origin), Gulf Oil (a Pittsburgh firm that later merged with Chev-
ron), and the Anglo- Persian companies that became BP.
For oil consumers, the postwar era of the Seven Sisters was practi-
cally utopian. Energy was secure, plentiful, and cheap. Western compa-
nies ran the show. Prices, by today’s standards, were rock steady. These
seven operating companies colluded to keep oil under $2 per barrel
from the 1950s until 1970.^18 For oil- producing countries, the Seven Sis-
ters were far more than just extractive enterprises. In states with mini-
mal institutional capacity, it fell to Western oilmen to provide essential
services. The oil business was a legitimacy resource right from the start,
beyond the simple provision of rents and cheap energy.
The US oil companies that joined to form Aramco sought to bol-
ster the power of the friendly al- Saud family as a way to counter
threats to the company’s monopoly access to Saudi reserves.^19 We ster n
expertise and technology delivered by international oil companies (IOCs)
reinforced the ruling families’ grip on power, by making the sheikhs
appear competent. Rulers understood their dependence on the oil com-
panies and, for a few decades at least, treated the firms with deference.
There were those, like Abdullah Tariki, the very first Saudi oil minis-
ter (and future OPEC cofounder), who demanded that the government
nationalize the Westerners’ holdings, but they were forced out. For the
oil companies, friendly autocrats were preferable to unpredictable dem-
ocrats who might succumb to populist demands and seek “resource
nationalism.” Propping up royals was an act of self- preservation.
A 1958 memo from Aramco vice president James Terry Duce to the
US State Department reveals the depth of Aramco’s involvement in