1960, the birth of OPEC
The Organization of Petroleum Exporting Countries (OPEC) was born on September 14, 1960, in Baghdad.
The stated objective of its 5 founding members - Venezuela, Saudi Arabia, Iraq, Iran and Kuwait - is to stabilize oil prices.
“
In the 1950s, oil reserves represented 150 years of production.
At the same time, demand is exploding with the switch from coal to hydrocarbons.
The big oil companies do not hesitate to lower the prices to facilitate the penetration of oil on the markets
”, explains Jean-Pierre Favennec, consultant and specialist in the energy sector.
This decline does not please the producing countries whose “
revenues are proportional to the price of the barrel
”.
They decide to organize themselves.
"
And it works.
For 10 years, the prices of the barrel will remain stable, at around 3 dollars
”, adds the expert.
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1973, the first oil shock
In 1973, the Yom Kippur War pitted Israel against Arab countries, and black gold became a weapon of war.
On October 17, OPEC cuts its production by 25% and declares an embargo against Western countries that support Israel.
The ever greater demand and the scarcity of oil are superimposed on this geopolitical context.
“
In 1973, we only had 30 years of reserves.
The United States, which until the 1950s produced half of the planet's oil, have gradually become importers,
”emphasizes Jean-Pierre Favennec.
The price of the barrel then goes from 4 to 13 dollars.
1979, the second oil shock
Six years later, geopolitical instability provoked a new oil shock.
This time, OPEC is a simple spectator of the Iranian revolution and the war between Iraq and Iran which will push the price of a barrel to 40 dollars.
Read also: The oil markets disrupted by the pandemic
The
1986
"
counter-shock
"
From the 1980s, the trend was reversed.
Supply is now greater than demand.
"
At the end of 1985, Saudi Arabia launched into a price war
", indicates Jean-Pierre Favennec.
The world's largest producer is increasing its production and allowing the market to regulate itself.
The other member countries of the organization are following suit.
The price of oil drops below 10 dollars.
“
OPEC then begins to lose control.
"
2008, the
"
third oil shock
"
In the 2000s, the price of oil was on the rise again, in particular driven by booming Chinese demand.
But production struggles to keep up, so much so that in July 2008, a barrel rose to over $ 140.
The 2008 crisis, which slows demand, interrupts this surge and brings prices down to less than $ 35.
OPEC is trying somehow to limit the damage by reducing its production and pushing the oil price back above $ 50.
Read also: Oil: OPEC reviews demand downwards for 2020 and 2021
2016, the birth of "Opep +"
In 2014, the American shale oil flooded the market and caused a very violent fall in the price of oil.
"
The OPEC meets but to the surprise of the markets, Saudi Arabia refuses to reduce its production so as not to favor American production
", explains Jean-Pierre Favennec.
It will be necessary to wait until November 2016 to reach an agreement between the OPEC countries to reduce the production of the organization.
A dozen countries, including Russia, will sign a similar agreement a few days later.
It is the birth of “Opep +” (Russia, Mexico, Kazakhstan, Azerbaijan, Bahrain, Brunei, Malaysia, Oman, Sudan and South Sudan).
2020, the consequences of the pandemic
The coronavirus pandemic has caused global demand for oil to drop by nearly a third and to swell inventories.
On April 12, OPEC and OPEC + agreed on a massive reduction in their production to redress prices.
