(OPEC), multinational organization (est. 1960, formally constituted 1961) that coordinates petroleum policies and economic aid among oil-producing nations. Its Board of Governors and board chairperson are elected by member nations; OPEC's headquarters are in Vienna, Austria. Members consist of Algeria, Angola, Ecuador (membership suspended 1992–2007), Indonesia (membership suspended 2009–15), Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Saudi Arabia has traditionally dominated the organization, owing to its enormous oil reserves; the organization's members produce about 40% of the world's crude oil.
In 1973, as a result of the Arab oil embargo against Western nations who supported Israel during the Yom Kippur War (see Arab-Israeli Wars), OPEC was able to raise oil prices tremendously; the price hike caused inflation in oil-importing nations. Increases ensued from 1975 to 1980. However, as importing countries pursued alternate energy resources, OPEC was forced to lower prices by 1982. Oil prices remained low through most of the 1980s and 90s, with only a temporary hike during the Persian Gulf crisis of 1990–91 (see Persian Gulf War). With the cooperation of non-OPEC oil-exporting nations, OPEC was able to raise prices in 1999 by cutting production. As prices rose above $30 a barrel in early 2000, OPEC members agreed to increase production somewhat, cutting back production again a year later in an attempt to maintain prices. A worldwide economic slowdown caused oil prices to fall to near $20 by late 2001, but cutbacks by OPEC and non-OPEC nations, an economic rebound (including very strong economic growth in China), and the U.S. invasion and occupation of Iraq subsequently caused benchmark prices to rise and stay above $40 in mid-2004. Efforts by OPEC to control prices, however, have generally been less influential than market forces, which in 2008, for example, drove the price of oil to nearly $150 in midyear and down to below $40 the year's end.
Related Credo Articles
The Organization of Petroleum Exporting Countries (OPEC) was founded in September 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela as a...
An organization founded in 1960 to represent the interests of the chief oil-exporting nations in dealings with the major oil companies. OPEC...
Full text Article Middle East, Economic Relations with the United States Since the Early Twentieth Century
Since the early twentieth century, U.S. trade relations with the Middle East region, which stretches from the Mediterranean Sea to the Arabian Penin