Oil : the five dates that have marked the history of Opec – The Echoes

Since its birth, the message of Opec is clear : to support the price of oil. Indeed, the cartel was born in 1960 at a conference in Baghdad to the initiative of Venezuela and saudi Arabia, both dissatisfied with the purchase price of the barrel (around 5$ ) imposed by the oil companies. They decide to create the Organization of petroleum exporting countries, which was joined by Iran, Iraq, and Kuwait. Today they are 14 members. To regulate the course, the cartel uses primarily the weapon of the faucet. According to the IFP Energies nouvelles, Opec intervened in the market more than 50 times by regulating its production since 1980 : 22 times at the lower and 27 times higher. This Wednesday, the organization has reached a new historical agreement to support the course.

1973 : the Closing of the valves

A war and the first oil shock mark this year. The barrel is abruptly increased from 3 dollars to about 12 dollars. This increase is the result of a significant reduction in production and an embargo against the United States that supported Israel during the yom Kippur war between the young State, to a coalition led by Egypt and Syria.

1979 : The second oil shock

This time, the organization as such is the main responsible. In 1979, if the price per barrel goes up to $ 40, this is mainly because of the iranian revolution, the war between Iran and Iraq, but also due to the revival of the global economy and therefore oil demand.

1986 : The first counter-shock

at the end of the 1980s the supply is abundant, and the demand is low. In spite of the weakness ” in the price of a barrel has each time upheld by the sole virtue of the decisions taken by Opec to reduce its production “, says the IFP. But in the fall of 1985, saudi Arabia wants to take liberties on the quantities being pumped out. The black gold unscrews and drops under 10 dollars. An agreement in the summer of 1986 allows to stabilize the price which will go up around $ 17 in 1987.

2008-2009 : Three production cuts

With the emergence of China in the years 2000 and with a continuously growing demand, the oil rises to the top and even reached the $ 140. The financial crisis puts a stop to this incredible increase. The barrels fall to less than $ 35. To arrest the fall, Opec decided to reduce its production of 4.8 million barrels per day in three times between the end of 2008 and beginning of 2009. The oil goes back above $ 50.

2014 : Opec decided to let pass the course

With the development of gas and oil in shale in the United States, the global supply greatly exceeds the demand. In mid-2014, the courses go from 110 to 75 dollars.Major turning point, in November 2014, the organization decides to no longer support the price. The strategy is to protect the market shares of the cartel and to kill the american production with a barrel too cheap for producers across the Atlantic.