Petrodollars

Abstract

The twentieth century was the age of oil, but for the first seven decades most oil producers received only modest benefits from their ownership of the world’s foremost fuel. This was especially so for the countries of the Gulf, though most of them only emerged as major producers after the Second World War. Even Saudi Arabia, with its vast reserves, found itself with a budgetary crisis in 1958.² But the glut of oil led to an announcement by the major oil companies in 1960 that they were cutting payments to producers. This led to the formation of the Organization of Petroleum Exporting Countries (OPEC) that year.

Mary Tudor, Queen of England, declared that the word ‘Calais’ was written on her heart.¹ For many bankers, the place nostalgically etched on their hearts was Jeddah’s Kandara Palace Hotel, where their scramble for petrodollars began.