In a gaffe late on Friday, a private meeting of OPEC oil, foreign and finance ministers was mistakenly broadcast to journalists, revealing a spat between Saudi Arabia and Iran about the waning US currency. The talks are intended to map out the strategic direction of OPEC, which produces about 40 per cent of world oil, but the group is divided on a number of issues. The event comes at a time of tension on world oil markets, with the cartel under pressure to increase its output to help calm record crude prices that had threatened to breach $US100 a barrel 10 days ago. OPEC's 12-strong membership is dominated by pro-Western Gulf states but includes an anti-US bloc of Iran and Venezuela. His remarks were tempered by King Abdullah of Saudi Arabia, the OPEC kingpin and key US regional ally, who said that 'oil is an energy for construction and must not become an instrument for conflict'. 'OPEC should set itself up as an active geopolitical agent.' It is stronger than it has ever been in the past. It is the underlying reason,' Mr Chavez said, pointing to the war in Iraq and US threats against Iran. He urged assembled leaders for OPEC meeting for only the third time in the cartel's 47-year history, to club together for geopolitical reasons. 'If the United States was mad enough to attack Iran or aggress Venezuela again the price of a barrel of oil could reach $US150 or even $US200,' he said. The fiery leftist leader warned that crude prices could double from their current already-record level of near $US100 a barrel if the United States attacked Iran or Venezuela. In his opening speech, Mr Chavez also urged the Organisation of Petroleum Exporting Countries (OPEC) to be actively involved in foreign policy. As more and more sources of oil are discovered, the power of OPEC has decreased over time.OPEC leaders have begun a summit in Saudi Arabia, with Venezuelan President Hugo Chavez issuing a chilling warning about oil prices. They now hold a considerable influence on the price of the oil in the world market, but not enough to forcefully control the prices. The recent discoveries of other sources of oil, had led to the ‘loosening of grip, by the Arab nations as the exclusive producers of oil. The decrease in the prices of oil continued for 6 years and served as a lesson to the complications of forcefully controlling the prices of oil in the market. The oil glut was due to the recent increase in oil which led to the decrease in consumption by other countries. The other countries (Arab Nations) followed suit and the ban was only lifted on March 1974, when the Israeli withdrew from the captured Syrian territory.ĭuring the 1980’s the prices of oil decreased dramatically (known as the Oil Glut) and it affected the economies of the countries that produced oil. This angered the King of Saudi Arabia (King Faisal) which proclaimed that a ban on oil shipments to the United States is in effect. President Nixon however did not waver and sent more forces to aid Israel in the war. This was all good until that ‘power, was used to politically influence decisions made by other countries or gain favor in return for ‘special services,.ĭuring the Yom Kippur War (October War) the OPEC used it’s authority to threaten the United States to stop helping Israel in the war. They regulated the production of oil so that the prices will not be too high and not too low either. The organization has done their part and made sure that the prices are kept within the ‘fair, amount and the markets stability was ensured.

Their main goal is to prevent the harmful increase in the price of oil in the global market and make sure to have fair profit, to the nations that produce it. This organization was made to make sure that the price of the oil in the world market will be properly controlled. OPEC stands for Organization of the Petroleum Exporting Countries.

Opec stands for