Dissertation_Dr Faisal Almubarak

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The decline was also partly caused by the crash of sugar and rubber prices in Java
and Malaya, whose Muslim population accounted for a significant number of foreign
pilgrims. Pilgrimage dues accounted for $30 million a year. Between 1920s and 1930s, in
order to boost the sluggish hajj season, Abdul-Aziz allocated modest improvements for the
holy cities in a desperate effort to encourage pilgrims. In addition, he applied strict security
measures to ensure the safety of pilgrims. Hitherto, pilgrims used to pay for safe passage
though tribal territories. This economic situation was drastically altered following the
discovery of oil in the late 1930s. King Abdul-Aziz abolished pilgrim dues charged to
Muslim pilgrims one year before his death in 1953.
B. Oil: A One-crop Economy
During the early decades of the twentieth century the world demand for oil as a major
energy source tremendously increased. For example, the conversion of the British navy
fleet from the use of coal to oil between 1914 and 1930s, and the booming use of
automobiles worldwide catapulted the demand for oil supplies and sent oil companies
franticly searching for more oil concessions overseas. Abdul-Aziz was tuned to the
promising news of oil ventures around the country. The first attempts to obtain Saudi oil
go back to 1923 when Abdul-Aziz awarded the first concession ever given in Saudi Arabia
to a British company in the Eastern area. Having failed to find promising quantities after
four years of exploration, the British did not renew the agreement and their operations
ceased.
The discovery of oil in Bahrain in 1932 by the Bahrain Petroleum Company, an
Anglo-American company, inspired new efforts to try the Saudi soil across the Gulf
shores. With unwonted alacrity Abdul-Aziz awarded a sixty-year concession to Standard
Oil of California (SOCAL) to start exploration for oil in the A1 Hasa province. An
agreement was signed in May 29, 1933. The Saudi concession to an American oil
company, which covered almost the entire Eastern Province, or one third the country's
land, represented a major break with the British monopoly of petroleum concessions in the
area. The American deal entitled the Saudi government to 100,000 pounds of gold as a
downpayment, which though meager, was a God-send and saved Abdul-Aziz's insolvent
treasury. After untoward trials in what seemed a futile effort, the SOCAL staff tried
digging deeper at well number seven. In March 1938, a vast underground reservoir of oil
was struck in the vicinity of Dammam, a small fishing settlement in the east province of the