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Mon 13 Sep 2010 04:43 PM

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50 years of OPEC

Arabian Business looks back at the key events in the history of oil producer OPEC, which turns 50 years old on Tuesday.

50 years of OPEC
The Organisation of Petroleum Exporting Countries turns 50 years old on Tuesday, having survived a tumultuous history of wars, embargoes and in-fighting. The world’s oldest and largest energy producer group is now enjoying prices close to the $75 a barrel level that its largest member Saudi Arabia considers 'ideal'. (OPEC website - images for illustrative purposes only)

(Text source: Bloomberg)
50 years of OPEC
Sept. 14, 1960: The organization was born in Baghdad. The five founding members - Iran, Iraq, Kuwait, Saudi Arabia and Venezuela - created the group during a five-day meeting in the Iraqi capital, dedicated to ‘the coordination and unification of the petroleum policies of Member Countries and the determination of the best means of safeguarding their interests.’

Sept. 1, 1965: The group moved its headquarters from Geneva to Vienna, where its secretariat is now based. Between 1961 and 1971 the following six countries join: Qatar, Indonesia, Libya, the United Arab Emirates, Algeria and Nigeria.(OPEC website - images for illustrative purposes only)
50 years of OPEC
October, 1973: The six-month Arab oil embargo pitted OPEC’s Arab members against the U.S. and Israel in a politically-motivated suspension of exports that pushed prices above $12 a barrel. The Paris-based International Energy Agency was created in 1974 by consumer nations, in response to the oil price shock. Ecuador and Gabon join OPEC in 1973 and 1975, respectively, only to leave the group later.

(OPEC website - image for illustrative purposes only)
50 years of OPEC
Dec. 20, 1975: Ilich Ramirez Sanchez (pictured), known as Carlos the Jackal, took more than 60 hostages during a raid on OPEC’s Vienna headquarters to protest against treatment of Palestinians by Israel.

(AFP/Getty Images)
50 years of OPEC
October, 1978: Protests and strikes in OPEC member Iran against ruling Shah Reza Pahlavi (pictured), deposed the following year in a revolution, cut the country’s oil production within three months to a 27-year low.

(AFP/Getty Images)
50 years of OPEC
Sept. 23, 1980: Iraq invaded Iran in the first war between OPEC members. During the eight-year conflict, with its attacks on oil-tankers in the Persian Gulf, group production plunged to a 20-year low.

October, 1981: OPEC members agreed to maintain oil prices within a range of $32 to $38 a barrel.

(OPEC website - image for illustrative purposes only)
50 years of OPEC
Aug. 2, 1990: Iraq’s invasion of Kuwait marked the second war among OPEC members. Repelled the following year by a U.S.-led coalition, withdrawing Iraqi troops set fire to Kuwait’s oil wells.

Nov. 29, 1997: At a meeting in Jakarta, OPEC raised production quotas for the first time in four years as the Asian financial crisis unfolds, sending prices as low as $10 the following December. Analysts often refer to the event as ‘the Ghost of Jakarta.’

Right: A low cloud of smoke still hangs over a mosque in Kuwait City just days after the Iraqi occupation. (Getty Images)
50 years of OPEC
August, 1985: Saudi Arabia abandoned the system of ‘posting’ oil prices to one in favor of letting the retail value of refined products such as gasoline determine the cost of crude.

1986: OPEC members switched to a new pricing system in which futures contracts traded on exchanges in New York and London effectively determined the cost of oil shipments.

(OPEC website - image for illustrative purposes only)
50 years of OPEC
June 24, 1998: OPEC was assisted by non-members including Mexico, Russia and Norway in cutting production as demand collapsed, helping revive prices. The coordinated action followed initial talks between Saudi Arabia, Venezuela and Mexico.

Jan. 1, 2007: Angola joined OPEC, its first new member since the 1970s. In November, Ecuador re-joined the organization following a 15-year absence.

Sept. 10, 2008: Indonesia exited the oil group after becoming a net importer, leaving the total number of members at 12.

(OPEC website - image for illustrative purposes only)
50 years of OPEC
Dec. 18, 2008: OPEC announced the largest production cut in its history as the financial crisis sent prices plunging from a record $147.27 a barrel in July, 2008, to near $30 by the year- end. Oil prices then climb 78 percent during 2009.

Sept. 14, 2010: In happy middle age, OPEC turns 50, with oil prices near $75 a barrel and above $70 a barrel for all but two weeks of this year.

(Right: Secretary General of OPEC Abdallah El Badri)

(Getty Images)