The Organization of Petroleum Exporting Countries (OPEC)

This chapter analyzes the history of OPEC from its founding to the second energy crisis, clarifying the organization’s transformation from a leading global oil producer to a significant international financial institution. The chapter commences with a succinct summary of the preliminary activities of Venezuela and Iran prior to the formation of the OPEC Treaty Organization. These activities were executed to cultivate a cohesive alliance among Arab and non-Arab oil producers, aiming to counteract the unilateral price reductions enforced by Western oil majors. Subsequently, the text asserts that OPEC altered its goal from averting price drops to attaining elevated prices prior to the Tehran Conference in 1971. Historical evidence substantiates this claim. It subsequently examines the initial oil crisis and the interval between the first and second oil shocks. This facilitates an analysis of the dynamics and tensions between OPEC and the West, particularly the United States, with the rise of OPEC as a new global financial force by the early 1980s.