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The Organization of the Petroleum Exporting Countries (OPEC) is
a permanent, intergovernmental Organization, created at the
Baghdad Conference on September 10�14, 1960, by Iran, Iraq,
Kuwait, Saudi Arabia and Venezuela. The five Founding Members were
later joined by eight other Members: Qatar (1961); Indonesia
(1962); Socialist Peoples Libyan Arab Jamahiriya (1962); United
Arab Emirates (1967); Algeria (1969); Nigeria (1971); Ecuador
(1973�1992) and Gabon (1975�1994). OPEC had its headquarters
in Geneva, Switzerland, in the first five years of its existence.
This was moved to Vienna, Austria, on September 1, 1965.
OPEC's objective is to co-ordinate and unify petroleum policies
among Member Countries, in order to secure fair and stable prices
for petroleum producers; an efficient, economic and regular supply
of petroleum to consuming nations; and a fair return on capital to
those investing in the industry.
These were OPEC�s formative years, with the Organization,
which had started life as a group of five oil-producing,
developing countries, seeking to assert its Member Countries�
legitimate rights in an international oil market dominated by the
�Seven Sisters� multinational companies. Activities were
generally of a low-profile nature, as OPEC set out its objectives,
established its Secretariat, which moved from Geneva to Vienna in
1965, adopted resolutions and engaged in negotiations with the
companies. Membership grew to ten during the decade.
OPEC rose to international prominence during this decade, as
its Member Countries took control of their domestic petroleum
industries and acquired a major say in the pricing of crude oil on
world markets. There were two oil pricing crises, triggered by the
Arab oil embargo in 1973 and the outbreak of the Iranian
Revolution in 1979, but fed by fundamental imbalances in the
market; both resulted in oil prices rising steeply. The first
Summit of OPEC Sovereigns and Heads of State was held in Algiers
in March 1975. OPEC acquired its 11th and final current Member,
Nigeria, in 1971.
Prices peaked at the beginning of the decade, before beginning
a dramatic decline, which culminated in a collapse in 1986 � the
third oil pricing crisis. Prices rallied in the final years of the
decade, without approaching the high levels of the early-1980s, as
awareness grew of the need for joint action among oil producers if
market stability with reasonable prices was to be achieved in the
future. Environmental issues began to appear on the international
agenda.
A fourth pricing crisis was averted at the beginning of the
decade, on the outbreak of hostilities in the Middle East, when a
sudden steep rise in prices on panic-stricken markets was
moderated by output increases from OPEC Members. Prices then
remained relatively stable until 1998, when there was a collapse,
in the wake of the economic downturn in South-East Asia.
Collective action by OPEC and some leading non-OPEC producers
brought about a recovery. As the decade ended, there was a spate
of mega-mergers among the major international oil companies in an
industry that was experiencing major technological advances. For
most of the 1990s, the ongoing international climate change
negotiations threatened heavy decreases in future oil demand.
SOURCE:
Organization of the Petroleum Exporting Countries (OPEC)
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