Organization of Arab Petroleum Exporting Countries - History

History

On 9 January 1968, three of the then–most conservative Arab oil states Kuwait, Libya, and Saudi Arabia agreed at a conference in Beirut, Lebanon to found the Organization of Arab Petroleum Engineering Countries, aiming to separate the production and sale of oil from politics in the wake of the halfhearted 1967 oil embargo in response to the Six Day War. Such use of the economic weapon of oil embargo in the struggle against Israel had been regularly proposed at Arab Petroleum Congresses, but it took the Six Day War for the embargo happen. However Saudi Arabia's oil production was up by 9% that year, and the main embargo lasted only ten days and was completely ended by the Khartoum Conference.

OAPEC was originally intended to be a conservative Arab political organization which, by restricting membership to countries whose main export was oil, would exclude governments seen as radical such as Egypt and Algeria. This organizational exclusivity was bolstered by an additional rule in the organization's charter requiring the three founders' approval all new members. The original aim was to control the economic weapon of potential oil embargo and prevent its use caused by popular emotion. Iraq initially declined to join, preferring to work under the umbrella of the Arab League, considering OAPEC too conservative. Equally the three founders considered Iraq too radical to be desirable as a member. However, by early 1972, the criteria for admission changed to oil being a significant source, rather than the principal source of revenue of a prospective member nation and Algeria, Iraq, Syria and Egypt had been admitted. Consequently the OAPEC became a much more activist organization, contrary to the original intention.

1973 was a turning point for the organization. In October that year, the forces of Egypt and Syria attempted to overwhelm the state of Israel in an offensive later known as the Yom Kippur War. On 16 October, ten days after the war's start, Kuwait hosted separate meetings of both OAPEC and the Persian Gulf members of OPEC, including Iran. OAPEC resolved to cut oil production 5% monthly "until the Israeli forces are completely evacuated from all the Arab territories occupied in the June 1967 war...." The embargo would last for some five months before it was lifted in March 1974 after negotiations at the Washington Oil Summit. The embargo's aftereffects would linger throughout the rest of the decade. For the oil exporting countries, the embargo was the first instance of the exercise of their ability to leverage their production for political gains. A number of the member nations would use this sense of control to renegotiate the contracts they had made with the companies that had discovered and exploited their resources. Ironically the vastly increased revenues would prove addictive, and a unified OAPEC oil embargo was never again possible.

In 1979, Egypt was expelled from OAPEC for signing the Camp David Accords, although it was readmitted a decade later.

OAPEC is regarded as a regional, specialized international organization focusing on organizing cooperation in oil development, collective projects, and regional integration.