The current rift between the Biden administration and the Saudi crown prince, Mohammed bin Salman, has historical roots in a troubled relationship that dates back to 1945. As Russian president Vladimir Putin invaded Ukraine in 2022, oil prices increased exponentially, contributing to high inflation globally and threatening a worldwide recession. To compensate for the loss of sanctioned Russian oil and ease pressure on businesses and industry, President Joe Biden sent a message to Salman with a request to increase oil production during the shortage. Within the parameters of the so-called special US-Saudi relationship, this is standard procedure.

Since the 1940s, the United States has pledged to protect Saudi Arabia’s monarchy and oil fields in return for stabilization of oil prices by increasing Saudi production whenever there was a need. Biden expected Salman to respond favorably to his demands — but the crown prince ignored the request. This was unusual. The United States protects the Saudi monarchy, arms it at a colossal cost, and shielded it from international sanctions when its erratic young prince ordered security operatives to murder dissident Saudi journalist Jamal Khashoggi in Istanbul in 2018.

US media started commenting on the “fractured relationship” and the betrayal of the prince in Riyadh. The new narrative reflects a recurrent tension between the United States and the oil-rich autocrats it has protected for decades. The crown prince not only refused to ease the ongoing energy crisis by pumping more oil across the Atlantic; he also failed to openly condemn Putin’s invasion of Ukraine. This double defiance is symptomatic of an uneasy relationship but hardly unexpected, given the history that is told in historian David M. Wight’s Oil Money: Middle East Petrodollars and the Transformation of US Empire, 1967–1988. Defiance and betrayal have been endemic since the 1970s and were often triggered by a bargain that the United States and Arab oil-producing countries usually honored but occasionally betrayed.

Covering the 1970s and 1980s, Oil Money helps us understand the past that continues to haunt the present. In his accessible and well-researched account, Wight sheds light on the historical origins of the promise and peril of a relationship in which the United States, the oil-producing Arab countries, and Iran have all failed to bring about a positive transformation of the petrodollar economy. This petrodollar economy, the central theme of the book, depended on a single commodity and was anchored in oil revenues received only in US dollars. Middle Eastern governments were meant to use the new dollars to build infrastructure and launch massive modernization programs. But they didn’t.

According to Wight, the logic of the petrodollar economy centered on using oil wealth for “modernization,” such as building new industrial cities, educational institutions, health provisions, and — above all — modern, well-equipped armies to defend the regimes and their new wealth. In return for guaranteeing the security of the oil regimes, the United States insisted that its contractors, businesses, and industries win most of the development contracts. The United States paid for oil in dollars, but these dollars were meant to flow back to the United States eventually. Wight historicizes this relationship between unequal partners that is in fact complex and occasionally defies simple categorization. Who had the upper hand in the relationship, the United States or the oil producers? Who did the blackmailing? Was the relationship fraught with contradictions, enmity, and resentment on both sides? And at what historical moments did it become troubled? These are some of the questions answered in this invaluable book.

According to Wight, from the second half of the twentieth century, oil was and continues to be the main backbone of the United States’ engagement with Middle Eastern oil-producing countries. It drew the United States closer to the Arab world and Iran and triggered the expansion of US power in the region. While many books have been written about this relationship, Oil Money offers new insights into the inherent contradictions and sinister aspects of the 1970s and 1980s, when the 1973 Arab-Israeli War triggered the oil embargo.

Many scholars of US foreign engagement after World War II hesitate to invoke the word “empire” to describe this legacy, but Wight does not shy away from centering empire in his analysis. Supporters promoted the newly emerging global US empire as a kind of petrodollar interdependence. But opponents labeled it as utter exploitation and moral bankruptcy.

Drawing on new historical sources and archives, Wight documents how petrodollar interdependence between the United States and oil-producing countries in the Middle East created mixed outcomes. The United States was drawn into the region in ways that enriched its economy. Technology transfer, arms sales, engineering services, consumer goods, and petrodollar direct investment in the US economy absorbed a substantial proportion of oil revenues. In return, the United States promised oil-producing countries security and modernization under US tutelage.

But petrodollar interdependence also became the foundation of a series of troubling crises — insecurity, warfare, revolutions, corruption, invasions, and even Hollywood mass culture with orientalist tropes. Thanks to US military and political support, undemocratic elites in the Middle East became stronger, more ruthless, and more corrupt. Wight argues that corruption on both sides became endemic, with authoritarian rulers, congressmen, lobbyists, and chief executives amassing substantial wealth at the expense of accountability and fairness. The story of oil here is one of contradictions with serious consequences for the people of both the Middle East and the United States.

Beyond the United States and the Middle East, oil wealth was used to undermine human rights, democracy, and justice around the globe. According to the author, under the pretext of fighting communism worldwide, the United States instructed its oil-rich allies to finance and support authoritarian rulers outside the oil region, for example, in Latin America and Asia. The mobilization of Saudi Islam in creating a jihadi force to liberate Afghanistan from Soviet occupation in the 1980s, ending the Cold War, was another example of petrodollars financing US geopolitical outcomes. Much-needed oil revenues were wasted or absorbed in corruption scandals — not spent on developing the economies and societies of the Arab world.

Wight gives several examples of the systemic corruption embedded in the US-led petrodollar economy. To save US agriculture from an imminent crisis in 1974, Pacific Northwest cattle owners entered into a deal with RJB Sales Inc. to liquefy and deodorize cow manure. A US transport company was contracted to ship it to Bahrain and Abu Dhabi to be used as fertilizer. A fairy-tale deal involving millions of dollars proved to be fraud, as the man claiming to be a Bahraini prince signing the deal turned out to be an airline clerk. By 1974, the Middle East had “become a place of such wealth that even dung transported halfway across the globe could conceivably be sold for a fortune.” Private US businesses aspired to get Arab petrodollars at any cost.

This was not only true of the US private sector but also of US foreign policy. Nobody summed up better than Henry Kissinger the nature of US foreign policy toward the oil-rich Middle East and its relentless scramble for Arab and Iranian oil wealth when he said:

If those Bedouins want to use all of their money to build soccer stadiums, that’s fine with me. . . . We should absorb as much of their money as we possibly can. . . . Our principal objective should be to maximize their dependence on us.

Under the guise of modernization projects, designed and carried out by US contractors, petrodollars plundered the resources of the many for the benefit of the few.

Wight appropriately explores how, after the 1973 oil embargo, US media and popular culture worked to enforce negative stereotypes about the oil-rich Arab sheikhs. Hollywood films and comedies depicted them as “dimwitted, opulent, sex-crazed, tyrannical and/or bloodthirsty villains.” The United States resented their sudden wealth and resisted their alleged takeover of US businesses and assets. This was dramatized in comedies that enforced negative images of Arabs, possibly paving the way for later discrimination against Muslims following 9/11. The terrorist attack itself, in Wight’s analysis, is one of the most sinister outcomes of the petrodollar economy. Predating that, the Iran hostage crisis, when US embassy staff were taken hostage in Tehran after the 1979 Iranian Revolution, is an earlier manifestation of the anger and frustration of Iranian nationalists, Islamists, leftists, and revolutionaries who felt that the United States plundered their resources and rewarded their oppressor, the shah. Retaliation against US interests became endemic not only in Iran but also in other capitals, from Tripoli to Riyadh. In Wight’s words, petrodollar interdependence proved to be a double-edged sword.

The book offers a nuanced analysis of the oil policies of several US presidents, their national security personnel, and their foreign policy advisers. From Richard Nixon to Ronald Reagan, Wight’s clear, chronological story fully grasps the US side of petrodollar interdependence. He carefully unravels multiple layers of US policymaking under the influence of the “oil shock” of the 1973 oil embargo.

The book is less informative when discussing the domestic complexities of the Arab and Iranian side. Readers who are not already familiar with the local histories of these countries may not acquire a full understanding of the struggles, aspirations, and disappointments of local activists and dissidents, who resisted not only their own authoritarian rulers but also the United States itself. Despite serious US and Western effort to find cheap alternative sources of energy, Arab and Iranian oil remains a valuable asset. Those who controlled it in the past know that almost a century after it was discovered in their arid zone, oil is still what draws the United States and the world to their region.

While oil was and remains important for US-Arab relations, other factors must be taken into consideration. Beyond the petrodollar economy, equally important was the geostrategic importance of the oil-producing region at a crucial location between the West and Asia. The historical period covered by Wight shows how important US military bases were — not only to protecting oil fields but also to launching aggressive military campaigns against rivals. US presence guaranteed intelligence gathering and meddling with local politics, to the detriment of many forces that opposed both US empire and subservient monarchs, who rarely defied their US patrons. Unfortunately, Wight does not cover this dimension of the relationship, although its beginnings were in the decades of the 1970s and 1980s that the book covers.

After 9/11, and under the guise of the “war on terror,” the region witnessed the worst atrocities and drone attacks in decades. Eventually, the US invasion of Afghanistan and Iraq were launched from territories in the oil belt stretching from Kuwait to Oman, including the vast deserts of Saudi Arabia. Indeed, the war on Yemen launched by Saudi Arabia could not have started without heavy US assistance, arms, and training centers established in the southern corner of the Arabian Peninsula.

Since 1979, maintaining a cold war situation between Saudi Arabia and Iran has served US interests well and divided the region along sectarian lines. The United States played an important role in this conflict, initially arming Iraq and Gulf oil-producing countries to continue a war that lasted for eight years, resulting in colossal human loss and draining the Gulf economies. Above all, the race to buy US arms accelerated with Gulf countries, increasing their military spending on US-manufactured fighter jets and other weapons. The United States amplified the threat of Iran and created uncertainty and potential confrontation in the Gulf even after the end of the Iran-Iraq War in 1988 — and, as a result, petrodollars had to be spent on US arms.

When the United States signed the Iran nuclear agreement (the Joint Comprehensive Plan of Action, or JCPA) under Barack Obama in 2015, many Gulf countries felt betrayed. But one nation played an important role in facilitating negotiations: Oman remains a central hub, clandestinely assisting with US deals in the region. Qatar came to play a similar role, acting as a launching pad for negotiations with the Taliban that led to the withdrawal of US troops in the summer of 2021.

There is, then, more to the petrodollar’s economy than oil. Even if the United States is no longer the primary consumer of Middle Eastern oil, its relations with the oil-producing countries persist. American empire in the region is destined to continue as the United States’ hold over this commodity allows it to manipulate the geopolitical fortunes of China and Asia.

In the ongoing battle over control of Middle Eastern oil, the current crisis involving Russia and US pressure on Saudi Arabia to increase oil production is just the latest episode. This led many to believe that Saudi Arabia is crucial to defeating Putin in Ukraine. But the Saudi crown prince refused to obey Washington on this occasion and continues to be cautious. He is also wary of any rapprochement the United States might have with his archenemy, Iran. The current revival of the US-led nuclear agreement with Iran, after Donald Trump withdrew from it, does not look promising — but there is a good chance it may lead to rehabilitating Iran and bringing it back onto the international stage. Such a development may aggravate the discord with the crown prince, stabilize oil prices as Iranian oil becomes available, and redirect US interests to Iran (as during the rule of the shah).

It is still premature to predict the outcome of the current US-Saudi rift. It is, however, likely that the United States will continue to engage with a defiant Saudi Arabia, lest the latter drift further into the arms of Russia. Oil Money will remain relevant to understanding the historical origins of a relationship fraught with contradictions and tensions. After two years of appearing to ostracize the prince, Joe Biden is planning to visit Saudi Arabia in July 2022. It remains to be seen whether this symbolic gesture will lead to a return to the old bargain: oil for security.