Importance of OPEC

The oil-producing nations' attempt to control production and prices in the form of a common front against the oil companies. It began in embryo at the April 1959 Arab Oil Congress, and was formalized in September 1960 by the five countries controlling 80% of the world's crude oil exports. It did not gain "muscle" until 1971 meetings in Tehran and Tripoli. After first wielding the "oil weapon" successfully in the 1967 Arab-Israeli War, OPEC succeeded in 1973, and began shifting economic and political power in its direction until 1977. At that time, falling demand for oil and competition from non-OPEC producers led to the "Great Inventory Dump" and falling prices. OPEC battled internally with quotas and pricing, as it lost absolute control over the industry.