Oil (4): OPEC Brief History Flashcards
When and where was OPEC created?
Conference in Baghdad, Iraq in September 1960.
What was the purpose of OPEC?
Bring stability to global oil market with policies and fair prices that keep supply steady.
What happened in the 1950s with Russia and the Seven Sisters?
Soviets increased oil output, forcing Seven Sisters to drop prices to compete.
Who are the Seven Sisters?
Esso, Mobil, Standard, Gulf, Texaco, BP, CFP
What issues arose with oil prices in 1962?
Each OPEC country wanted to export more, but this would drop the price.
What did Arab countries impose in 1967? Why did it fail?
Arab countries put an embargo on countries supporting Israel during the Six-Day War in 1967. It failed because Venezuela and Iran (OPEC) did not support this.
What policy was enshrined for nations in 1968? Why was it important?
Declaratory Statement of Petroleum Policy in Member Countries to give nation rights to their natural resources. Important cuz they were former colonies.
In the 70s, Arab and Western countries had problems again relating to Israel. What happened?
US/others helped Israel in Yom-Kippur War in 1973. Arab countries put embargo on oil sales.
What were three impacts of the oil embargo put on Western nations in 1973?
- Rise in pice as supply decreased + transportation costs
- OPEC members have political tensions
- They were reliant on Western countries for oil refinement but now had embargo.
What trend started in the 1980s regarding oil?
There was fear it’s becoming scarce. Started looking to other sources like coal, nuclear, natural gas
What two factors in the 70s put pressure on OPEC?
- Iranian Revolution lowered supply.
- New Oil Markets: Mexico, North Sea, Siberia, USSR
What changes happened in 1988 and 1989 that affected oil industry?
In 88, Iran-Iraq war ended and OPEC was more stable.
In 89, USSR collapsed.
What invasions took place in the 90s?
Iraq -> Kuwait
America -> Iraq (Saudi filled gap)
Which ongoing conflicts still affect the oil industry?
Libya, Nigeria, Iraq, Syria
