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OPEC "OPEC." Global Issues in Context Online Collection. Detroit: Gale, 2014. Global Issues In Context. Web. 11 Feb. 2014. Document URL http://find.galegroup.com/gic/infomark.do?&source=gale&idigest=9cd77541e3656d857e4b7af450 7212ef&prodId=GIC&userGroupName=nort87507&tabID=&docId=CP3208520412&type=retriev e&contentSet=GREF&version=1.0 The Organization of Petroleum Exporting Countries (OPEC) is one of the most powerful and controversial global organizations in the world. It consists of twelve of the top twenty oil exporting countries, which together hold nearly four fifths of the world's known oil reserves. Although many Americans associate OPEC with the Middle East, the organization also includes countries such as Venezuela, Ecuador, and Nigeria. OPEC's dramatic influence on world petroleum markets has led many American politicians to call for energy independence from "foreign oil," through the development of alternative energy sources or by attempting to increase drilling production within the United States. OPEC was created in 1960 by five founding member nations: Saudi Arabia, Iraq, Iran, Kuwait, and Venezuela, which were all developing nations with extensive oil resources that understood the importance of petroleum to the wealthiest nations of the world. They sought to form an alliance that would allow them to maintain control of their country's oil reserves, rather than simply selling off oil rights to global corporations. This arrangement also gave them greater control of oil prices through coordinated production; at the time of OPEC's formation, the founding members controlled just over one fourth of the world's oil supply. By limiting the amount of oil they produced, they could potentially cause the price of oil to increase, thereby increasing their own profits. As the organization grew in size, OPEC's power as a controlling force in the petroleum industry became clear. In 1973, Arab members of OPEC placed an embargo on oil exports to the United States, partly in response to U.S. support of Israel in its territorial dispute against Palestinians and other Arab nations of the Middle East. OPEC members also sought to cut production and thus raise oil prices for all their exports in an attempt to bolster their generally weak economies. The embargo and production cut had a dramatic impact on oil prices, causing the cost of oil—and petroleumbased products like gasoline—to triple almost overnight. The crisis was fairly short-lived, though oil prices remained elevated throughout the 1970s, and spiked in 1979 when one of OPEC's key members, Iran, experienced a revolution that derailed the country's oil production for a time. Oil prices fell throughout the 1980s and stabilized during the 1990s, but began to soar at the end of the century. Between 2003 and 2008, the price of oil quintupled, reaching nearly $150 per barrel. Although OPEC has often been blamed as the main culprit by consumers in the developed world, its member nations as a whole increased production levels between 2003 and 2006 in an attempt to ease the price spike. The group agreed to cut production in 2008 after prices finally began to fall, but Saudi Arabia—by far the largest oil exporter in the organization—vowed to continue its high production levels to satisfy global demand. At a 2011 meeting, OPEC members could not agree on a plan to raise production levels in the face of continued high oil prices. Some members argued that the global supply was adequate and that the high prices were the result of other factors. Indeed, at a time when OPEC production remained fairly steady, oil prices rose and fell dramatically; one possible explanation is the interference of commodities speculators, who had recently been granted greater access to participate in oil markets. Politicians in the United States have frequently criticized OPEC for allowing politics to play a role in their decisions. Some OPEC nations, such as Venezuela and Iran, have poor relations with the United States; indeed, the United States has maintained a trade embargo against Iran for more than fifteen years. When U.S. Special Forces killed terrorist Osama bin Laden in Pakistan in 2011, Venezuela was the only country to officially condemn the action. In contrast, OPEC's most important oil producer, Saudi Arabia, has maintained close economic relations with the United States. Another OPEC rival of the United States was Libya, led by longtime dictator Muammar Gaddafi. In 2011, when Libyan citizens began to protest the Gaddafi regime and call for a democratic government, the leader destroyed his own country's largest refineries and essentially shut down its oil industry—presumably to punish foreign nations that relied on its exports. Gaddafi was overthrown and killed in late 2011, and the country's new leaders quickly went about the business of once again ramping up oil production. Some analysts have argued that OPEC is already operating near peak production, and that as its oil reserves decline, so too will its influence on the world oil market. The recent success of other, nonOPEC oil producers—including Russia and Canada—have also led some to suggest that OPEC's importance as a "swing supplier" is fading. However, world oil consumption continues to grow each year, and without affordable alternative energy solutions, OPEC seems likely to play a key role in the oil market for decades to come. In fact, far from declining, OPEC's crude oil production reached 30,667 million barrels a day in December 2011, its highest level in three years. Full Text:COPYRIGHT 2014 Gale, Cengage Learning Gale Document Number:CP3208520412