OPEC, an abbreviation for the Organization of the Petroleum Exporting Countries, was created in Baghdad in September, 1960. The original participating countries were Kuwait, Venezuela, Iran, Iraq, and Saudi Arabia. Throughout the '60s and '70s, nine other counties joined, some of which have suspended their memberships. The objective of this intergovernmental organization is to unify petroleum policies among countries that are members of OPEC. This ensures that prices for petroleum will remain fair and that those investing in the industry will have a fair return on their investments.
Starting in the '70s and into the '80s, OPEC gained international distinction. In 1973 and 1979, oil prices spiked because of the volatility of the market. A new era of cooperation was established, which enabled a more stable petroleum economy to form. In the '80s, prices weakened and then crashed altogether in 1986, due to the public's turn away from petroleum as a fuel source. Many of OPEC's members had a tough economic time as revenue dipped below 33% of earlier revenue amounts. Toward the end of the 1980s, fuel prices began to recover, but only accounted for about half of the revenue OPEC members were used to. At about this time, environmental issues sprang into light as an important international consideration.
In the '90s, prices were less dramatic than in the two previous decades. However, generally weak prices dominated in the decade, especially with the South-East Asia economic slump. By 1998, petroleum prices were equivalent to 1986 costs. Still, recovery in the market followed as OPEC sought fairness in how the oil supply should be treated following the Earth Summit in 1992. One country deserted OPEC altogether, as another suspended its affiliation with the organization.
From 2000 to 2010, skyrocketing oil prices have been seen. Because of several forces in the market and speculation, 2004 experienced high prices, despite the well-supplied market of crude oil. In 2005, a long-term strategy was formulated in regards to environmental efforts. Prices continued to climb to record heights in 2008, until the economic recession. OPEC became highly involved in addressing the global economic recession during this time, as one country joined the efforts of OPEC while another reactivated its membership and one suspended its membership.A Brief History of OPEC
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