organization petroleum exporting countries

Organization of Arab Petroleum Exporting Countries

The Organization of Arab Petroleum Exporting Countries or OAPEC is a multi-governmental organization headquartered in Kuwait which coordinates energy policies in Arab nations, and whose main stated purpose is developmental.

On January 9, 1968 three of the (then) most conservative Arab oil states Kuwait, Libya and Saudi Arabia agreed in Beirut to found OAPEC, aiming to separate oil production and sale from politics in the wake of the halfhearted 1967 oil embargo related to the Six Day War. Such use of the oil weapon in the struggle against Israel had been regularly proposed at Arab Petroleum Congresses, but it took this war for it to happen. However, Saudi Arabia's oil production was up 9% for that year, and the main embargo lasted only ten days and was completely ended by the Khartoum Conference.

OAPEC was originally intended to be a conservative Arab political organization which by its restriction in membership to countries whose main export was oil would exclude governments seen as radical, like Egypt and Algeria, and had the additional rule that the three founders' approval was necessary for new members to join. The original aim was to control the oil weapon and prevent its use from being swayed by popular emotion. Iraq initially declined to join, preferring to work under the umbrella of the Arab League, as it considered OAPEC too conservative. Equally, the three founders considered Iraq too radical and did not want it as a member. However, by early 1972, the criterion for admission changed to oil being an important, rather than principal source of revenue, Algeria, Iraq, Syria and Egypt had been admitted, and the organization became much more activist, contrary to the original intention.

1973 was a turning point for the organization. In October that year, the forces of Egypt and Syria attempted to overwhelm the state of Israel in what would be known as the Yom Kippur War. Ten days after the war started, on October 16th, 1973 there were separate meetings in Kuwait of OAPEC and also of the Persian Gulf members of OPEC, (which also included Iran). OAPEC resolved to cut oil production 5% monthly "until the Israeli forces are completely evacuated from all the Arab territories occupied in the June 1967 war..." The embargo would last for some five months before it was lifted in March 1974 after negotiations at the Washington Oil Summit. Its aftereffects, though, would linger throughout the rest of the decade. For the oil exporting countries, the embargo was the first sign of their ability to leverage their production for political gains. A number of them would now use this sense of control to renegotiate the contracts they had made with the companies that had discovered and exploited their resources. Ironically, though, the vastly increased revenues would prove addictive, and a unified OAPEC oil embargo was never again possible.

In 1979, Egypt was expelled from OAPEC for signing the Camp David Accords, but it was readmitted a decade later.

It is now regarded as a regional specialized international organization and focuses on organizing cooperation on oil development, collective projects and regional integration. At present it has eleven members, Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Syria, Tunisia and the United Arab Emirates. Tunisia asked to withdraw in 1986 and its membership is currently suspended.

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References

  • J.B. Kelly (1980). Arabia, the Gulf and the West. Basic Books. ISBN 0-465-00416-4.

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