Opec Agreement Timeline

The OPEC Agreement Timeline: A Historical Look

In December 2016, OPEC, the Organization of the Petroleum Exporting Countries, made a historic agreement with non-OPEC members to cut oil production. This move helped to stabilize the oil market and boost prices, but it was not the first time that OPEC had taken such a measure. In fact, OPEC has a long history of agreements and disagreements when it comes to oil production levels. Here`s a look at the OPEC agreement timeline:

1960-1970: Formation of OPEC and Production Limits

OPEC was founded in 1960 by five oil-producing countries: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. These countries sought to control their oil prices and protect themselves against international oil companies. Throughout the 1960s, OPEC established production quotas for its members in an effort to restrict supply and prop up prices.

1970s: OPEC`s Power Grows

In 1973, OPEC flexed its muscles by imposing an oil embargo on countries that supported Israel in the Yom Kippur War. This move sent shockwaves through the global economy and led to a surge in oil prices. In the late 1970s, OPEC further consolidated its power by forming a pricing mechanism that linked oil prices to a basket of currencies.

1980s: OPEC Battles for Market Share

In the early 1980s, OPEC became embroiled in a battle for market share with non-OPEC members, particularly the Soviet Union and Mexico. This led to a period of overproduction and falling prices, with OPEC members cheating on their quotas to gain a competitive edge. By the end of the decade, OPEC had lost much of its market power.

1990s: Production Limits Reestablished

In the early 1990s, OPEC once again began to restrict production in an effort to prop up prices. This was aided by the collapse of the Soviet Union and the Gulf War, which disrupted production from non-OPEC members. By the end of the decade, OPEC had once again established itself as a powerful force in the oil market.

2000s: OPEC vs. Non-OPEC

In the 2000s, OPEC continued to battle non-OPEC members for market share. This was particularly evident in the rise of US shale oil production, which threatened to undermine OPEC`s pricing power. In 2014, OPEC once again decided to restrict production to boost prices, leading to the 2016 agreement with non-OPEC members.

Today: The OPEC+ Agreement

The current OPEC agreement, signed in 2019, involves OPEC members and non-OPEC members, led by Russia, who have agreed to cut production levels in an effort to stabilize the oil market. This agreement is set to expire in 2022, but OPEC and its allies are likely to continue working together to manage the global oil market.

In conclusion, the history of OPEC agreements shows the organization`s ability to impact the oil market. While OPEC has had its ups and downs, it remains an important player in the global oil industry. The OPEC+ agreement is just the latest example of the organization`s efforts to manage supply and demand and ensure stable prices for producers and consumers alike.