“As a negotiator,” says one American oil company executive, “Yamani is superb. He is patient and polite and knows variations on every trick in the book. For example, we found that whenever a tight situation arose Yamani would go to the telephone. We all knew that he was not a maker of policy, that he negotiated within a framework, that he was always under instructions. But I’ll be damned, as soon as anyone was about to score a point, he’d disappear to the telephone and all the momentum against him would dissipate.”
Adds another, “Yamani whispers, never threatens. His deadliest tactic is to probe for holes in your argument by calmly repeating question after question until finally you’re so weary you’d hand over your grandmother.”
Having finely tuned his negotiating skills in arenas as tough as OPEC and the world oil market, Yamani is more than just confident when it comes to explaining his approach, grandmothers notwithstanding.
Call this brief class then Negotiation 101. Professor Yamani presiding. “The main thing in any negotiation is to know exactly what you want. To know the bare minimum that you can accept, and the maximum of what you are hoping for. Once you’ve got those two things clearly defined, you must mentally put yourself on the other side of the table and try to study the weaknesses they have. You must try to figure out how much they can give away and how much you can expect from them. It is only in light of what you then conclude about their strategy that you can draw a tactic.”
The key, he says, is patience. “As any negotiation proceeds, it’s essential to be patient. But you must also allow the negotiations to move along. Don’t let them bog down. And never lose your temper. Once you lose your temper, that’s the end of your ability to negotiate.”
There is, he’s told, one old axiom of negotiation that goes, when money is at stake, never be the first to mention sums. The thinking behind it is that you may be underpricing your views or willing to pay over the odds for theirs.
He ponders that for a moment before he says, “Yes, but only as a general rule and not as an absolute. I agree that you should not be the first to mention figures unless you have to. Except that there are times when you must.”
As a matter of fact, he says he did just that in his very first negotiations with Aramco. “I had to come up with a figure because my predecessor, Tariki, had already stated that he wanted a certain sum of money to settle a particular problem. I started off by naming that figure. But I did that only to make it very clear that I would never accept one dollar less. So there are exceptions to the rule, like when a figure is not negotiable. But otherwise, that’s right, don’t be the first to say a figure because the other side may offer you more.”
In cases where you have a group of companies, or several interest groups working together, he advises, know the various contacts of interest that might exist and how you can utilize that to your own advantage.
Here OPEC is a good example. “There are some pretty shrewd people negotiating there. You have all kinds of mentalities. You also have lots of conflicts of interests. You have those members with a small oil reserve and a short life-span for their reserves. Their interests are to raise the price of oil as high as they can for the next five to ten years. And they don’t care about anything beyond that because they won’t be exporting oil after that date. Then there are those with small reserves who want to remain as oil exporters for the next 50-80 years. They want to keep their production low. Finally there are important producers who want to maintain a steady supply to the market because it is their major source of income. But eyen there you find differences in marketing and value differentials. Negotiating under circumstances where you have so many views to consider requires a lot of patience.”
Again patience.
He says, “Yes, again patience. Maybe that’s why I love to go fishing when I’m on holiday. I take my family fishing with me when we’re on holiday because fishing is a great way to learn patience.”
*****
Caracas, Venezuela, December 1979.
OPEC is at the Tamanaco hotel and the helicopters are overhead and the armed soldiers are guarding the roads. Negotiations are under way.
All the ministers meet daily around a table in the main ballroom. Afterwards, only some of them meet the press.
Sheikh Ali Khalifa al-Sabah from Kuwait is fairly good at that. He’s part of the Kuwait royal family, born there in 1945. He went to university in San Francisco, so his English is perfect and he understands the western media. He’s known by the reporters who cover OPEC for being very intelligent, for being the only minister who even comes close to being Yamani’s intellectual equal. And some say, one day, he could challenge Yamani for the starring role. But Kuwait doesn’t have the same oil clout as Saudi Arabia. It’s rather like saying the Bulgarians never produced a fellow with the same charisma as Stalin. Of course not. They never had the same number of divisions.
Next is the UAE’s Sheikh Mana Saeed Oteiba. He’s a few years older than Ali Khalifa and fancies himself a poet. He’s a likeable enough man who hands his poetry out to anyone who looks like they’d care to have a copy. He enjoys the spotlight. But stars are born, not made. And when the lights are turned on, when the camera is rolling, he doesn’t have the presence.
Then there is the minister from Qatar. Abdul Aziz bin Khalifa al-Thani has been his country’s OPEC representative since 1973. He’s the son of the ruling Sheikh. And he too has visions of stardom. He arrives at this meeting in his private 707, with an entourage that includes his own hairdresser and his own television crew. He doesn’t speak a lot in the meeting. In fact, he arrives late and leaves early, the way he always does, just so the journalists will speak to him. Behind his back the OPEC press corps call him “Li-Fo” - last in, first out.
Finally there’s Professor Dr. Subroto. He’s the Indonesian minister without a first name. He’s always happy to talk to the press.
But, at the end, they’re all second division. Centre stage belongs to Yamani. He fields questions at the large noisy press conferences with the ease of Olivier doing Hamlet.
Spot oil has reached $39 a barrel.
Everyone wants to know if prices could go even higher.
The media are looking for a front-page story.
So Yamani gives them their front-page story.
He stands at the podium, half-hidden by microphones, smartly dressed in his perfectly cut dark suit, and announces to the world that there will be an oil surplus some time in the next two years. He predicts that, before the end of 1981, members will be fighting amongst themselves, and that the price of oil will come under serious threat. He predicts that the price of oil might even collapse. And that’s just about the last thing anybody expects him to say.
You mean, someone asks, come down gradually?
No, he answers, the word is collapse!
Collapse? With prices still going up, it’s kind of hard to believe. Understandably, some of the press go running off to see if anyone else in Caracas is willing to corroborate Yamani’s views.
The Nigerian oil minister says to them, “Yamani is joking.”
And the Iranian oil minister suggests to them, “Yamani is out of his mind. We know he doesn’t drink alcohol but maybe he’s taking drugs.”
*****
Dhahran, Saudi Arabia, three weeks later.
Yamani tries again. This time it’s in a speech at the University of Petroleum and Minerals.
Pressure is continuing to build throughout the Gulf to raise the price of oil. But here the white-robed Yamani tells a fully packed university auditorium, “There will be a drop in the price of oil and a sharp decrease in our level of production.”
Saudi Arabia is producing nearly 10 mbd.
He predicts before long they will go below 4 mbd.
And now the white-robed audience snickers.
They come very close to laughing at him.
They sit there thinking, Yamani is talking nonsense.
He urges them, “Just make some basic calculations. The first law of economics is that when the price goes up, consumption comes down. This is a divine law. You cannot change it.”
He reminds them, “Prices for Arab Light went from $11.70 to $18, then $24, then $28. What has to be the result? A lower level of consumption. In 1979 the OPEC share of the market went to a little more than 31 mbd. We were pumping 3 mbd more than the year before. What does this mean? It means there was a huge amount of oil not going for consumption but instead going for stock.”
He asks them, “All right, so you stock oil, but for how long? That oil must come back one day as an additional source of supply. It means the level of production must drop in OPEC, from 31 mbd to 27 mbd, then 23 mbd, then 20 mbd. The producers must fight each other for market share and that brings the prices down even lower.”
At Dhahran they find it as hard to believe as the reporters did in Caracas.
But they should have believed him. Because as oil climbed from $35 to $39 and then edged over $40 in the spot markets, most of the world’s oil producers made the exact same mistake.
They thought the party would never end.
*****
When Jim Akins was recalled as US Ambassador to Saudi Arabia by Henry Kissinger in 1974, the State Department sent William Porter. The joke that went around the State Department was that Akins had been too pro-Arab, so Nixon sent Porter to Jeddah to get even.
When Jimmy Carter was elected President he replaced Porter with John West, a former fellow southern governor.
Short, stocky and an old school southern gentleman, West met Yamani for the first time in Washington, during King Fahd’s visit to the States in May 1977. As West had not yet been sworn in, the meeting was little more than an introduction and a hand shake.
Four or five weeks later, once he’d settled into a daily routine at the Embassy in Jeddah, West felt it was time to call on Yamani.
The Saudi oil minister invited the new American Ambassador to meet with him in a relaxed, informal setting at his summer home at Taif. They sat outside on the wicker furniture next to the pool, drinking fruit juice, chatting amicably for 10-15 minutes.
Once West felt he’d paid his respects, he stood up and told Yamani that he’d only stopped by to say hello. He told Yamani that he didn’t want to take up any more of his time.
But Yamani motioned to West to stay. He said, “I’m happy to see you and anyway you’ve already spent more time with me than your predecessor ever did.”
It was the beginning of an especially warm and long friendship. The two got along so well together that every year on Mrs. West’s birthday, Yamani would invite them to Taif for the weekend.
“One year my wife and I took our daughter and my secretary along,” West says. “Now, Zaki is a very attractive man. My daughter was then in her 20s and my secretary was then in her 50s. Both of them were unmarried. On the way home, my daughter and my secretary said to me, we understand that Saudis can have more than one wife, do you think he’d be interested in us? You know what. I’m not so sure they were joking.”
The friendship was more than just social. It worked on many levels. And because it did. West admits that he owes Yamani a real debt. “Before every OPEC meeting, there were all these task forces back in Washington. The State Department, the Office of Management and Budget, the Treasury, everybody was trying to predict what OPEC was going to do. Well, my friendship with Yamani was such that I could go to him and ask, what’s going to happen. He’d say, this is what our range will be, or he’d say, I’m sorry but I can’t discuss this with you. He was always very frank and forthright. He never misled me in the slightest. It’s funny, but because of that, I got a reputation of being an oil expert that I certainly didn’t deserve.”
During West’s four years in Saudi Arabia, the United States found itself almost totally dependent upon the Saudis to keep the price of oil under some degree of control. So West’s easy access to Yamani was a valuable pipeline for the men formulating American oil policy.
Just before the OPEC meeting in December 1977, Yamani said to West that talk around the cartel was for a price increase West sent that information to Washington. Back came a cable from Treasury Secretary Blumenthal who said he felt that, in order to control inflation, OPEC had to keep its prices fixed.
West relayed that information to Yamani, who answered that a modest price increase of 10-11 percent might be in order, pointing out that all of the OPEC countries save Saudi Arabia and maybe Kuwait were in deficit financial situations. As inflation had been rising at 8-10 percent, Yamani explained to West than an increase in the price of that amount would simply maintain the status quo.
West sent that message back to Blumenthal. But it wasn’t what Washington wanted to hear. Blumenthal must have brought it up at a cabinet meeting because the next thing West knew, Jimmy Carter and Cyrus Vance asked him to make an all-out pitch directly to the King and the Crown Prince, hoping their intervention could get the rest of OPEC to keep the status quo.
So West duly requested an audience and it was duly granted. But when he walked into the king’s office, he found himself alone with Khaled, Crown Prince Fahd and Prince Sultan. Yamani was not present.
After West explained what the President was hoping for, Fahd answered that Saudi Arabia could not freeze the prices all by itself at the OPEC meeting, that in order to do it he would have to enlist the help of one other major producer, such as Iran. West said he understood. The meeting ended with the three royals promising to see what they could do.
Immediately after leaving the king’s office, West went to see Yamani. It was literally a matter of minutes between the two meetings. But the first thing Yamani said to West was that he already knew everything about West’s discussion with the three royals, and had already been ordered by the king to go to the Gulf countries to try and get some support for the price freeze.
West had to be impressed at how fast the news travelled.
But Yamani felt the need to caution him. “You’re making an awful mistake because your economy can stand a 10 percent rise. However, if you freeze the prices now the dam is going to break one of these days and your economy can’t stand that.”
When West sent his report back to Washington, outlining the results of his discussion with the royal family, he also included a couple of paragraphs restating Yamani’s feelings.
At the time, the Shah was in the United States on an official visit, talking to President Carter. Within a matter of days, just long enough for West’s report to pass through the system at Foggy Bottom and make its way over to Pennsylvania Avenue, the Shah agreed to join the Saudis in freezing the prices.
“I can only speculate about this,” West says, “but it’s the logical conclusion that President Carter’s very laudatory statement given on New Year’s Eve 1977, you know, that the Shah was an ocean of tranquility, was at least in part a repayment of the fact that Iran joined Saudi Arabia in keeping the prices down. Subsequently, of course, after the Shah’s demise, Yamani’s prediction came true. The dam broke and it wrecked our economy. Once again, Yamani had clearly called ±e shot.”
West doesn’t particularly know why Yamani wasn’t at the meeting with the king and the two princes, although he’s willing to hazard a guess. “Zaki worked under extremely difficult conditions. During Faisal’s time he could make the decisions. But it became quite apparent that when Fahd took over he couldn’t.”
However, he notes, Yamani always had his own special way of dealing with members of the House of Saud. “He can be respectful without bowing and scraping. It’s a fairly unique talent. For the most part it served him well.”
Still, West remarks, from the day he arrived until the day he left, there were constant rumors floating around that Yamani was either about to be fired or on the verge of quitting. “It related back to the time when Faisal gave him full authority over oil policy. It seems after that, he never had too much patience for other members of the royal family. Rumors were rampant that Prince Saud, Faisal’s son and Yamani’s former deputy, would become oil minister. That might have been in the works until the oil job became less desirable than being Foreign Minister.”
The State Department heard the rumors too and they often queried West about them. “One of the last times they wired me about the rumor I decided to go straight to Zaki and ask him about it. Khaled was still alive then. I said, is it true? He said, no, it isn’t. But he said that he didn’t want to stay on forever because the job was wearying and it had its difficulties.”
Interestingly enough, during that discussion, Yamani made a point of telling West that he wasn’t going to resign under pressure. “He said he had a good relationship with King Khaled. Everybody knew that he wasn’t on very good terms with Crown Prince Fahd, so I always got the impression that he felt his relationship with Khaled was a safety factor or a kind of insurance policy.”
In February 1981, a little more than a year after the Ayatollah’s return to Iran, with uncertainty the key word where oil was concerned, Yamani returned to the University of Petroleum and Minerals at Dhahran to make another key speech.
In Arabic, he told the packed crowd of students and Arab oil executives, “If we force western countries to invest heavily in finding alternative sources of energy, they will. This will take them no more than seven to ten years and will result in their reduced dependence on oil as a source of energy to a point which will jeopardize Saudi Arabia’s interest. Saudi Arabia will then be unable to find markets to sell enough oil to meet its financial requirements.”
John West heard about the speech, asked for a translation of it, plus a transcript of the question and answer period that followed it, and realized right away that, in his own way, Yamani had just revealed a key element to post-Shah Saudi oil policy.
Says West, “Certain Arab leaders, like the ones in Iraq and Libya, often accused Yamani of being too friendly with America. But I never felt he ever prejudiced the interests of his own country. Yamani made that speech at a time when Saudi Arabia was trying to hold prices down and he was personally being criticized for not going along with the other countries who wanted to raise the prices to something like $100 a barrel.”
After Yamani’s speech, some of the students wanted to know why he continued to go along with the imperialists. They asked him, why don’t you agree to keep production down and let oil prices seek their level.
West explains, “He said something like, we have enough oil reserves to continue at the present rate to the year 2050. He said, if I were the oil minister of Algeria or Nigeria or one of those countries that has oil reserves only for another ten years, I would want to get a maximum price. But, he said, I understand western technology and western attitudes. And this was what fascinated me about his speech. He told them, if western technology concentrates on developing alternative sources of energy they can do it in under ten years.”
It turns out that Yamani had hired a team of consultants to determine that, as long as the price of oil stayed below $30 a barrel, it was economically impractical for the oil consuming states to develop those alternative sources of energy. He later told West that Iraq had been among the hawks, fighting for price rises, until they saw the results of that survey. Having long-term oil reserves, they suddenly did an about-face and joined the Saudis in trying to hold down the price.
West continues, “Of course, the subsequent facts have proven Yamani out. With oil below the price of $30, every one of our alternate energy programs is gone and everybody is predicting that the price of oil is going to be very high again before the year 2000. It’s amazing how consistently right Zaki is.”
*****
John West could get along with Zaki Yamani because he understood that Saudis feel more comfortable with a one-on-one relationship.
“The problem,” notes another member of Carter’s cabinet, “has always been that Americans don’t understand the Saudis. The Saudis are very circumspect. The Americans come crashing in there in a businesslike manner. But the Saudis are Middle Easterners. They don’t deal with offices, like the Secretary of Commerce or the Vice President of the United States. They deal with individuals. They either know you or they don’t know you. They have to trust you. The fact that you hold an office merely provides you with an opportunity to talk to them. But as far as they’re concerned, it’s the relationship that’s all-important. The formality of the office is much less important. They’re also very polite. They beat around the bush. They’ve got circumlocutions. Americans go out there and don’t understand that part of the problem.”
According to James Schlesinger, who also served in Carter’s cabinet, one of the keys to Yamani’s success was that he could always deal with westerners pretty much on a western basis.
“His behavior is not exactly the archetypal American behavior. But he understands the culture. Now mind you, he’s a lawyer and a diplomat, so that whatever position he’s trying to sell, he’s selling consistently, even though he may not believe in that position. In that sense, he’s not necessarily giving you all of his innermost thoughts. And, yes, he sometimes takes the oblique approach. But most people who’ve dealt with him found that he always came to meetings prepared with a degree of candor and frankness that most of the others couldn’t achieve.”
Yet, in the more abstract world of generalities, Americans have always seemed to hold a black and white view of the Arabs. Much the way young children can see the world filled with cowboys and Indians, or cops and robbers, American foreign policy makers tend to have an adolescent predilection for pigeon-holing. Where the Arabs are concerned, the categories are defined as moderates and extremists. And the Saudis top the moderates’ list.
They are, of course, inexorably linked to the United States. America invented Aramco and turned Saudi Arabia into a petroleum power. America helps to equip and to train the Saudi military. America is the Saudis’ largest single trading partner.
At the same time the United States wants to keep Saudi Arabia on the top of the pile because the Saudis hold such a unique political place in the Arab world. And they know it.
Yamani has often cautioned westerners - especially Americans - not to take Saudi friendship for granted. He tells them that in order to begin to understand his country they must understand that Saudi Arabia’s first priority is self-reliance, and that its second is relations with its Arab brothers.
In that regard, the Saudis’ huge oil reserves have turned them into the Arab world’s pay masters. However, their check book has never really brought them sufficient muscle to impose long-standing policies on other Arab nations. Or if they’ve got the muscle, then at least since 1973/74, they’ve seemed oddly reluctant to flex it.
They’ve never been able to dictate a settlement in any of the various crises where the Egyptians, Lebanese, Syrians, Jordanians or Palestinians have been concerned. They haven’t been successful in ending the war between Iran and Iraq. They never stepped in to assume the Shah’s role as policeman to the region. And they admittedly tremble at the thought of the Ayatollah’s Islamic fundamentalism spreading to their side of the Gulf.
They are, as it happens, heavily committed to the survival of the previously hostile regime of Iraq’s President Saddam Hussein. There is no way they would want to see the Ayatollah win a war that would, in turn, replace Hussein with a Shi’a fundamentalist. In this case the” Saudis have put their money where their ideals are. But financing the Iraqis into a stalemate with Iran has been costly. In the first two years of the war alone, it is believed that Saudi Arabia spent about $10 billion to aid Saddam Hussein. That’s not necessarily because they want to see the out-numbered Iraqis win. It’s rather that they are committed to seeing the religious extremist Iranians lose.
Still, the Saudis are also very much the glue that keeps the Arab world bound together. While the Saudis see Qaddafi’s Libya as too far gone to retrieve, Saudi Arabia was the one to bring Egypt back into the Arab fold after the several cold-shoulder years that followed Camp David. In 1981, it was Crown Prince Fahd who made the first attempt at an all-Arab initiative which came very close to a de facto recognition of Israel’s right to exist. And, despite ideological differences, the Saudis consider Syria to be such a vital part of the puzzle that today the two court openly.
Much in the same spirit, towards the very end, of 1980 and into the beginning of 1981, the Saudis found themselves in the middle of a top-secret deal to try to bring the American hostages out of Tehran.
Washington’s intelligence sources had come up with the tidbit that it was Yassir Arafat and the PLO who had trained the Ayatollah’s personal revolutionary guards. Ever opportunistic, Carter’s people - among them Secretary of State Cyrus Vance and head of the National Security Council Zbigniew Brzezinski - looked for some way to use this in a last-ditch attempt to get the hostages home before Ronald Reagan took office in mid-January.
They felt that if they could somehow pull it off – especially without informing the incumbent President, who would have had a fit if he’d known - it would give Carter the chance to leave office a hero. At the same time, it would embarrass Reagan, a sort of “don’t get angry - get even” slap in the face for Carter’s massive defeat at the polls.
Their hopes lay in the belief that Arafat, for his direct support of the Khomeini regime, must hold a marker with the Ayatollah and could, if he chose to, call it in by asking for the return of the hostages.
Obviously the very notion of such a plan raised several serious questions. Would Arafat go along with it? Would the Ayatollah go along with it? What would Arafat want in return from Carter? Would Carter be willing to pay the price? And how would the American public accept Arafat’s role?
The last question was answered first.
If Arafat succeeded, it would be Jimmy Carter’s success and the end would justify the means. If Arafat failed, no one would ever find out.
Because the White House could never approach the PLO leader directly, Carter’s people appealed to the Saudis. Negotiations were immediately begun between the United States and Saudi Arabia, quickly followed by negotiations between the Saudis and Yassir Arafat. Within a matter of a few days, a deal was struck.
Arafat, after confidently reassuring the Saudis that he could bring the hostages out, agreed to call in his marker with the Ayatollah. In turn, Crown Prince Fahd agreed to send his private Boeing 707 to Tehran to fly the hostages directly to Washington’s National Airport. Jimmy Carter agreed to be there to welcome the hostages home.
Once everything was set – which means, once Carter himself said he was willing to pay the price that Arafat wanted - the PLO leader went to Iran, and Fahd’s plane moved into position on the tarmac at Tehran.
The reason the deal never came off was because Khomeini told Arafat, in no uncertain terms, he didn’t owe the man anything. Without any discussion, he flatly refused to hand over the hostages.
However, if Arafat had been successful he would have collected an unbelievable prize. In exchange for the hostages, Jimmy Carter had agreed that Arafat could accompany the hostages to Washington.
Then, when Arafat stepped off Fahd’s plane, in full sight of the world’s press with cameras rolling, the outgoing President of the United States would personally welcome him - man whom some people still considered to be a fugitive terrorist – like a hero, with a warm and very public embrace.
*****