BEFORE OIL15exports and anticommunism. The American- led exploitation of the
kingdom’s oil and Saudi Arabia’s geopolitical significance to the United
States reinforced political control for the al- Saud, ensuring the ruling
family received credit for oil- funded national development. US protec-
tion expanded to neighboring sheikhdoms when the British departed the
Gulf in 1971. The Carter Doctrine of 1980 formalized the US role by
declaring that America would use force, if necessary, to defend its inter-
ests in the Persian Gulf.
The key to America’s strategic interest was the kingdom’s willingness
to invest in spare oil production capacity— “spare capacity”— and to
deploy it to bolster US policy in the Middle East. Saudi Arabia became
the world’s “swing producer” because of its ability and willingness to
balance the market by adjusting its production.
Holding spare capacity is no trivial matter. No other oil producer has
been willing to invest billions of dollars in infrastructure that sits idle.
Certainly no shareholder- owned company would do so. But Saudi Ara-
bia, for decades, has deliberately maintained more capacity to produce
oil than it uses. The kingdom does so because it reaps geopolitical power
from its ability to protect the oil- importing world from volatile price
spikes. This role enhances the kingdom’s value as a US ally and as a con-
tributor to global financial stability.
Spare capacity is the factor that still obliges Washington to work
hand in hand with the Saudis in the region. The Saudis raised output
to stabilize oil prices in response to Iraq’s invasion of Kuwait in 1990,
the US- led invasion of Iraq in 2003, the 2011 campaign in Libya, and
antinuclear sanctions that blocked exports from Iran until 2016.
Oftentimes, Saudi spare capacity protects the US motorist from US
foreign policy.
The kingdom’s sheer size and global importance signify the high
stakes that rest on its successful stewardship of its natural resources.
With the exception of two short periods in the 1980s, Saudi Arabia
has been the world’s number- one oil exporter for nearly half a century.
Its well- being depends on Riyadh’s ability to maintain its commanding
role in oil markets, since oil exports form the basis for the strategic