Encyclopedia of Islam

Organization of Petroleum Exporting Countries

  

533  J

---

include Qatar, i

ndonesia

,  l

ibya

, the United Arab 

Emirates, Nigeria, and a

lgeria

. Today the OPEC 

countries account for 40 percent of world 

oil

production. Initially the stated goal of OPEC was 

to nationalize and gain control of its members’ oil 

resources, which at the time were held primarily 

by American, British, and Dutch transnational 

corporations, including British Petroleum, Exxon, 

Texaco, and others.

By 1973 many of the OPEC countries had 

made progress in seizing control of their oil 

resources. However, it was not until the out-

break of the 1973 Arab-Israeli war that OPEC’s 

international power became visibly apparent, 

when, led by its Arab members, OPEC doubled 

the price from $2.55 to $5.09 per barrel, and 

the Arab countries imposed an embargo on the 

United States because of its close ties with i

srael

.

Between 1973 and 1978 OPEC raised the price 

three times. However, OPEC’s unity began to 

fray in 1980 when war broke out between Iraq 

and Iran, two of its most important members. 

Falling demand meant lower prices from 1983 

onward, and the flooding of the market in 1986 

by Kuwait and Saudi Arabia, aimed at weakening 

Iran, brought the price down. Leading up to the 

1990–91 Gulf War, s

addam

  h

Usayn

 (r. 1979–

2003) urged OPEC to push world oil prices up, 

but the disunity among OPEC countries failed 

to bring that into effect. As oil prices continued 

to drop, OPEC coordinated a scaling back of oil 

production beginning in 1998.

In mid-2004 OPEC announced that its mem-

bers had little excess pumping capacity, indicat-

ing that it was losing influence over oil prices. 

Faced with record oil prices in 2006 OPEC 

members declared their inability to increase out-

put in order to drive prices down, leading some 

to speculate that the organization’s power may 

be waning. However, although OPEC countries 

have accounted for an average of 40 percent of 

world oil production since 1970, the amount of 

proven world oil reserves under their control is 

much higher, at around 69 percent. This implies 

increased OPEC production as a proportion of 

total world production over the long term.

See also a

rab

-i

sraeli

 

conFlicts

; g

UlF

 W

ars

.

Joshua Hoffman