The Organization of the Petroleum Exporting Countries

The Organization of the Petroleum Exporting Countries (OPEC) was established in September 1960 in Baghdad by Venezuela, Iran, Iraq, Kuwait and Saudi Arabia.1 The establishment of the Organisation was a countervailing action on the part of the oil producing countries against the reductions of posted prices by the international oil companies.2 The price reduction had taken place without prior consultation with the oil producing countries. Previous separate attempts by the governments of these countries to expand their influence on the production and pricing of oil had failed to be effective.3 Since the Bandung Conference, the developing countries had discovered the potency of collective action, and they were pressing for international economic reforms in the United Nations. In 1960, the first development decade was announced and the the first UNCTAD conference was on the drawing board. For the oil producing countries, the price reductions were the straw that broke the camel’s back.