How the U.S.-Saudi Oil Alliance Is Repeating in the Electric Economy: History Doesn't Repeat but It Rhymes

In the 20th century, oil ruled the world. It fueled economies, triggered wars, and shaped global superpowers. The United States rose to dominance by securing a powerful oil alliance with Saudi Arabia, exchanging military protection for stable oil supplies.

Today, a new global battle is underway — not for oil, but for control over the future of electricity and clean energy. This time, the race isn't about barrels of oil — it's about battery minerals, rare earth elements, and the technologies that power electric vehicles (EVs), AI data centers, and smart cities.

Why This Global Power Shift Matters Right Now

Recent diplomatic moves show history repeating itself. In May 2025, the U.S. announced it would lift sanctions on Syria and encouraged Damascus to normalize ties with Israel — with Saudi Arabia once again playing middleman, as the Trump administration signed massive investment and arms deals in Riyadh. While these moves are framed as peace-making, the real game includes economic control and securing dominance in the coming electric era.

From Oil Barrels to Battery Cells: The Great Energy Shift

| 20th Century Energy Economy | 21st Century Electric Economy | |---|---| | Oil powered cars and industries | Electricity powers EVs, AI data centers, and smart grids | | Saudi Arabia controlled oil | China controls battery minerals and clean energy tech | | U.S.-Saudi oil alliance ensured energy dominance | U.S. now builds alliances for lithium, cobalt, rare earths, and chip technology |

Why Electricity Is the New Oil

The entire future economy — EVs, AI, smart homes, renewable energy grids — runs on electricity. The heart of this system? Batteries — and their key ingredients: lithium, cobalt, nickel, and rare earth elements.

China controls roughly 70% of global battery production and 90% of rare earth refining — enormous leverage over the new energy economy.

Does the Middle East Still Matter in the Electric Age?

The Middle East may not have vast reserves of critical minerals, but it's positioning itself as a financial powerhouse in the electric future:

• What it lacks: no significant deposits of lithium, cobalt, nickel, or rare earths (some copper in Saudi Arabia and Oman, but not enough to dominate).
• What it's doing about it: Saudi Arabia's Manara Minerals (Ma'aden + the sovereign wealth fund) is buying stakes in global mining companies, including a $2.6 billion stake in Vale's base-metals business in Brazil. The kingdom invested heavily in U.S. EV maker Lucid Motors and is building NEOM, the $500 billion smart city planned to run entirely on clean energy. The UAE invests globally through its clean energy company Masdar, across renewables and mining ventures.

If the Middle East can't mine these minerals, it plans to own the companies that do.

How the U.S. Is Building New "Electricity Alliances"

Just as it once secured oil through Saudi Arabia, the U.S. is now creating partnerships for the resources and technologies critical to the electric economy:

• Australia: major supplier of lithium — the "white gold" of batteries.
• Chile & Argentina: home to the world's largest lithium reserves.
• Africa (DR Congo, Zambia): rich in cobalt and other critical minerals.
• Canada & Europe: building independent battery and chip supply chains to reduce dependence on China.
• At home: the Inflation Reduction Act invested billions into EV production, battery plants, and advanced semiconductor manufacturing.

The Big Picture: Control the Resources, Control the Future

Even if oil is no longer the dominant resource, the Middle East remains influential through its financial muscle. While the U.S. focuses on controlling who mines and processes the critical minerals, the Middle East is ensuring it has ownership stakes in those industries.

Final Takeaway: History Doesn't Repeat, But It Rhymes

• In the 20th century, oil determined the winners of global power.
• In the 21st century, electricity, batteries, and clean energy technologies will decide the new superpowers.

The U.S. understands this shift and is moving fast — through diplomatic deals, massive investments, and strategic alliances. Just as the U.S.-Saudi oil alliance shaped the last century, today's emerging "electricity alliances" will shape the next.

Originally published May 2025.