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A Half-Century of OPEC.

Byline: Randa Takieddine

OPEC is celebrating the 50th anniversary of its establishment in September of this year. Today, OPEC ministers in Vienna will open a new General Secretariat, five decades after the establishment of the organization, one that has changed and become a tool of stability in world oil markets and protecting the financial resources of developing countries. Some of these countries have benefited from these resources in development, and others have wasted them on failed policies and revolutions. However, the organization has managed to survive despite the wars between its members. The First Gulf War, between Iran and Iraq, followed by the Iraqi invasion of Kuwait, the war to liberate Kuwait, and then the US war on Iraq, have all been tragic for OPEC's members. However, the organization has held on nonetheless. It has been able to continue and overcome several crises, such as the terror attack by Carlos the Jackal and his group, when they kidnapped oil ministers and executives in a leading exporting state, put them on a plane and threatened to kill them. The then-Algerian oil minister, Abdul Salam Baled, saved them from Carlos in Algeria. OPEC was also able to survive after the October 1973 War, when the US administration, following a decision by Secretary of State Henry Kissinger, established the International Energy Agency in Paris. The goal was to destroy OPEC. The representative of the US government, Thomas Anders, said in 1974 that the IEA would destroy "the OPEC cartel." It was forbidden for any member of this agency to sit at the same table with OPEC. Today, everyone, led by the US, wants to cooperate with OPEC. In the last decade, the organization has become a prime tool for the stability of oil markets, thanks to its ability to manage production levels in international markets. After its establishment in 1962, it struggled to raise the price of oil, which oil companies had set prior to their nationalization at $2-11 a barrel. OPEC was able, after nationalization in the 1970s, to manage prices. However, it quickly confronted a price fall in the 1980s, to $8 a barrel. OPEC countries were unable to manage price levels due to countries outside the organization increasing their production and pushing prices down to very low levels.

Today, OPEC has changed, despite all of the political tension that exists among some of its members; OPEC decisions are taken as a business management decision and everyone takes part in keeping oil prices at levels that satisfy everyone, while avoiding politics.

We hear a lot about Saudi Arabia's very positive role at OPEC conferences. Minister Ali Al-Nuaymi has played a big role in the last decade in calming the debate at OPEC meetings according to former ministers, such as Algeria's Noureddine Ayit Hussein, who has followed OPEC's activities for 40 years. Al-Nuaymi is a modest person with long experience in the oil sector (he came from ARAMCO, where he worked his way up to the top), which has allowed him to play a very positive role in OPEC, as a minister representing the biggest producing state. He listens to all opinions and offers the impression that he is a good listener and does not impose a decision. However, Ayit Hussein says that nothing happens without him, even if he listens carefully to everyone.

Certainly, everyone acknowledges that OPEC meetings have changed. In the 1980s, they would go on interminably, for days sometimes. One of them in London, at the Intercontinental Hotel, lasted for ten days without an agreement being reached. There were OPEC ministerial meetings that lasted for days, with tensions and political disputes. There were rejectionist fronts and hard-line fronts within the organization. Today, the ministerial conference of OPEC will take only a few hours, and end within a day or half a day. Oil prices are act acceptable levels for consumers and producers, between $70 and $80 a barrel. When the price rose to $147, everyone knew that it was not because of OPEC, which had greatly boosted its production, while prices kept rising because of speculators in financial markets, who took part in the global financial meltdown of 2009 and 2010.

The former Venezuelan oil minister, Alirio Parra, who served from 1992 to 1994, says that OPEC is now the only tool in the international oil market and has become global, since it takes decisions like a board of directors.

2009 Media Communications Group

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Publication:Dar Al Hayat, International ed. (Beirut, Lebanon)
Date:Mar 17, 2010
Words:744
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