-Formed in 1960 in response to pricing decisions taken unilaterally by the oil co.
Gulf Basing Point Pricing - Intl. price of oil linked to US domestic prices. But price link untenable bec. divergence in relative production costs between USA and M.E. Co. with large-scale access to Gulf seek to increase mkt. share. 1959 and 1960 co. cut posted prices in M.E. and Venezuela without consulting the Gvts.
-OPEC created with explicit intention of restoring cuts in posted prices and requesting more consultation from oil co.
-OPEC'S ROLE 1960s.
1960s: membership expanded.
Venezuela, Saudi Arabia, Iran, Iraq, Kuwait, Abu Dhabi, Algeria, Indonesia, Libya, Qatar.
-Impact: limited.
Main function in 1960s: act as a forum where less important terms of the concessions discussed and renegotiated esp. royalty expensing.
-OPEC'S CHANGING ROLE 1970s.
-changing role in late 1960s and early 1970s as sought to extend its negotiating net to the issue of PARTICIPATION and crude oil pricing.
-its role in events became controversial.
How far OPEC as an organisation initiated and directed, and also reacted and followed. Individual members may have done both.
-OPEC helped oilproducers by allowing exchange of information, sometimes provided support via bargaining by solidarity. But the participation was largely a Gulf affair and in pricing the initial breakthrough came from Libya.
-OPEC central to TEHERAN AGREEMENT and TRIPOLI AGREEMENT, it was mostly Gulf members that initaited the price increase in OCT.1973.
