Oil Embargo

Topics: 1973 oil crisis, Peak oil, Energy crisis Pages: 4 (1590 words) Published: May 28, 2013
Darryl Laforteza
US History
9 May 2012
                       The One Paper to Rule Them All The Organization of Petroleum Exporting Countries (OPEC) was created in 1960 with the idea of unifying and protecting the interests of petroleum-producing countries but in the end, only resulted into little impact until 1973. Before this organization, the great oil companies of the West ruled the roost. Oil is the lifeblood of the industrialized nations as it is used to fuel planes, cars, tanks, skyscrapers, fertilizer, drugs and synthetics. Yet back before the days of OPEC, the great oil companies often retained 65% or more of the revenue from a product that was produced on someone else's property. Then in 1960, many of the oil producing nations, from both the Middle East and elsewhere, formed a cartel to protect their interests. The members of this organization include: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Libya, The United Arab Emirates, Algeria, and Nigeria. Their goal was to “slowly take over the function of the companies – beginning with production, and then increasing the amount of revenues they could retain. Despite that, their impact on the world was very little, but, that all changed because of the Arab-Israeli War of 1973. The OPEC oil embargo dramatically impacted the way Americans viewed scarce resources and how they found new sources of energy, as well as converse energy independently. OPEC’s formation by five oil-producing developing countries in Baghdad in September 1960 occurred at a time of transition in the international economic and political landscape, with extensive decolonization and the birth of many new independent states in the developing world. In 1973, the U.S. and the Western world were in the midst of an inflationary spiral. The world had become highly vulnerable to commodity cartels, as twenty years of prosperity and accelerating population growth had created heavy demand for raw...
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