OPEC ROLE AND INFLUENCE IN THE STRUGGLE FOR LEADERSHIP IN OIL PRODUCTION IN THE 60 – 70 ss. XX CENTURY

Abstract

The Organization of Petroleum Exporting Countries (OPEC) is an international organization created for the purpose of coordination of actions regarding sales volumes and pricing of crude oil. The article analyzes the role and influence of the OPEC in the struggle for leadership in oil production in the 60s and 70s of the 20^th century. The circumstance of the creation, purposes and tasks of the Organization of the countries-oil exporters are explored. Attention is drawn to the fact that OPEC's basic goal was to maximize revenues of member governments from oil extraction and exports. To achieve this goal, in the first place it was necessary to achieve stabilization of oil prices.

It is stated that, OPEC succeeded in limiting the ability of oil companies to unilaterally reduce oil prices, although the organization needed more than 10 years to return prices to the level of February, 1959.

It is emphasized that the struggle for the purpose of the organization was quite fierce and was accompanied by repeated exacerbations of the situation in the oil industry of the Gulf countries. After the fierce resistance of oil companies, governments of the member countries of OPEC violated their monopoly for the establishment of reference prices and took a direct part in the process of their formation. OPEC as the organization proved its strength and viability in the first major encounter with oil monopolies. As a result, the positions of oil exporters strengthened, their financial situation improved. Some adjustments in the struggle for oil were brought by the national liberation movement in some countries. Besides it is noted that the changes in the pricing system were not by far the only ones in the Middle East oil supply system.

It is concluded that the creation of OPEC was dictated by an objective necessity and in many respects helped restore the necessary «fair» balance in the area of pricing in the oil market. OPEC strengthened and turned into the most influential organization in the oil market and began to play a significant role in the global economy and politics as a whole. During the 1960's – 1970's the the share of the exporting countries incomes from exports increased,moreover, some countries nationalized a part of their oil industry. When in 1973 the United States supported Israel in the war with Egypt, Saudi Arabia and other arab producers announced an embargo on oil exports to the USA in return. As a result of the embargo imposed, world oil prices increased fourfold, thus demonstrating the effectiveness of «oil weapons».