Demand Of Oil Producing Countries

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The very first international agency created to allow oil-producing countries to achieve their economic objectives was OPEC. The organization was modeled after the Texas Railroad Commission and formed at the Baghdad Conference in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela . The founding five counties were later joined by Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, and Nigeria . At the time of its creation most industrial countries were immensely dependent on the oil imported from the region of the world represented by the OPEC members. Nonetheless, the member countries had yet to devise a workable system for responding to serious disruptions in oil supply before OPEC. OPEC’s purpose was to serve as a sort of cartel. It would “co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.”

During the 1960s, OPEC was only modestly successful in influencing oil prices, which remained relatively stable. OPEC member counties did not gain control of their own oil production decisions until the 1970’s because oil companies had a large stock, and therefore a proportionately large say, in many of the OPEC countries’ oil production businesses. During the period of 1969-1972, OPEC countries began setting barrel prices without negotiation with the

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