Organization of Petroleum Exporting Countries (OPEC)

In 1960, representatives of five countries (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela) met in Baghdad, Iraq, to form the Organization of Petroleum Exporting Countries (OPEC). Their goal was to strengthen oil exporting countries’ bargaining position in their dealings with the major oil companies (MOCs), often called the Seven Sisters. The MOCs consisted of (1) Royal Dutch Shell, (2) Anglo-Persian Oil Company (now BP), (3) Gulf Oil, (4) Standard Oil of California (now Chevron), (5) Texaco (now merged with Chevron), (6) Standard Oil of New Jersey (now Exxon), and (7) Standard Oil of New York (now part of Exxon). The act that provoked OPEC’s formation was the MOCs’ unilateral 10% price reduction of Middle Eastern and Venezuelan oil in February 1959. Thus, OPEC was formed ...