New book details OPEC’s oil journey over 60 years

The Organisation of Petroleum Exporting Countries [OPEC] has survived the pessimism of mid-20th century critics, member expulsions and readmissions, regional conflicts, and price volatility to ride the oil boom over the last 60 years.

Last week the 13-member OPEC launched the book ‘OPEC 60 years and beyond: A story of courage, cooperation and commitment’ in Baghdad where founding members Iraq, Iran, Saudi Arabia, Kuwait and Venezuela launched OPEC on September14, 1960.

Part One records the group’s history, starting with the build-up to OPEC’s creation in 1960 and up to its 60th anniversary. Part Two looks deeply into specific cross cutting issues, to further explore what the Organisation stands for and where it is heading, including chapters on dialogues, OPEC seminars, development, OPEC and its host country Austria, and the environment.

In his remarks at the book launch, OPEC Secretary-General Mohammad Sanusi Barkindo said, “Baghdad on 14 September 1960 was a day when the five Founding Fathers of OPEC, Juan Pablo Pérez Alfonzo of Venezuela; Abdullah al Tariki of Saudi Arabia; Dr Tala’at al-Shaibani of Iraq; Dr Fuad Rouhani of Iran; and Ahmed Sayed Omar of Kuwait gathered in the Al Shaab Hall in this great city, to midwife OPEC into the world.

“This seminal event, known as the historic ‘Baghdad Conference’, saw these five visionaries from our Founder Member Countries gathered around the premise of cooperation and with the need to write their own story. Pérez Alfonzo said after the meeting: “We are now united. We are making history.”

“That history spans more than six decades, despite some sceptics suggesting it would last little more than a few years. We have witnessed many ups-and-downs. We have seen seven major market cycles, including the latest - the COVID-19 pandemic. We have evolved as an integral part of the international energy community.”

The book highlights OPEC history, its adversities, challenges, successes and the importance of dialogue and co-operation with both producers and consumers.

The world and the OPEC have survived two major energy crises in 1973 and 1979. Petroleum shortages in the Americas, Western Europe, Australia, and New Zealand set off the first in 1973 during the Jewish Festival of Yom Kippur or the Ramadan War. The second crisis in 1979 came on the heels of the Iranian Revolution or the Islamic Revolution. This revolution triggered the energy crisis because it disrupted oil exports from the Middle East.

In the feature article on the 1979 oil crises, Time magazine, in its edition dated February 5, 1979, wrote, “The nation [United States] depends on Iran for only about five per cent of its petroleum needs, but other countries are nowhere near so lucky. Worldwide, Iran normally supplies about 20 per cent of the total petroleum imports of all the consuming nations. Japan usually relies on Iran for 15 per cent of its needs, and Western Europe is heavily dependent on Iranian oil, as is Israel, whose oil needs the US has pledged to fulfil in the event of shortages. If the flow of Iranian oil remains stopped up for long, the industrial nations will have to begin sharing the still available supplies. If that happens, the US could suffer much more than a five per cent drop in its normal supply and availability of crude.”

In their book Macroeconomics [Canadian Edition, Worth Publishers] authors and economics professors emeritus Gregory N Mankiw and William M Scarth (2003) write, “Although there were genuine concerns with supply, part of the run-up in prices resulted from the perception of a crisis. Stagnant growth and price inflation during this era led to the coinage of the term stagflation.”

Oman is one of the ten non-OPEC participating countries of the 'Declaration of Cooperation', and has a long and rich history of collaboration with OPEC, spanning nearly three decades. Qatar ended its membership on January 1, 2019.

[Sudeep Sonawane, an India-based journalist, has worked in five countries in the Middle East and Asia. Email: [sudeep.sonawane@gmail.com]