OPEC Founded in Baghdad
The Organisation of the Petroleum Exporting Countries was founded in Baghdad in September 1960 by Venezuela, Saudi Arabia, Iraq, Iran, and Kuwait in response to unilateral price cuts by the major Western oil companies (the 'Seven Sisters'). The founding document asserted member states' right to permanent sovereignty over their natural resources — a principle then novel in international economic law. OPEC's initial decade was modest in effect: the cartel lacked production discipline and the companies retained pricing power. The 1973 oil embargo transformed OPEC's significance: member states used their production collective to quadruple oil prices within months, demonstrating that commodity control could be wielded as a geopolitical weapon and that the Western industrial economy's structural dependence on cheap Gulf oil was a vulnerability as serious as military exposure.
- Year: 1960 CE
- Category: Economic
