What is OPEC? OPEC is a permanent intergovernmental organization, created in 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The five Founding Members were later joined by nine other Members: Qatar; Indonesia; Socialist Peoples Libyan Arab Jamahiriya; United Arab Emirates; Algeria; Nigeria; Ecuador; Angola; and Gabon. The purpose is to coordinate oil production policies in order to help stabilize the oil market and to help oil producers achieve a reasonable rate of return on their investments.

 OPEC is a group of oil producing nations that work together to set prices on their oil.

What is the Issue? With the oil price regulating authority that OPEC has acquired, the economies of the world are constantly in a state of flux due to:  OPEC’s pricing of oil  prices of heating oil, gasoline, diesel, and the like are directly influenced  prices of other goods and services are also influenced

 With this pricing authority comes great political power; enough power to keep the western world held at the mercy of the OPEC nations.

 Simply put, OPEC can control the World Economy by the amount they charge for their oil.

 In October 1973 OPEC nations raised the price of oil to America by 70%.  There were several reasons for this:  1.) Wheat we sold to Middle Eastern (OPEC) nations was marked up by 300% of the value we sold it for other places.  We bought crude oil from OPEC nations, refined it and sold it back to them at a markup of 100%.

 The Soviet Union was selling weapons to Syria & Egypt.  So we sold weapons to Israel.

 On October 6, 1973, during Yom Kippur, the holiest day of the Jewish calendar, a Syrian armored force of 1,400 tanks backed by more than 1,000 artillery pieces and supporting air power began a coordinated assault along the 36-mile-long Israeli-Syrian border in the Golan Heights in the north of Israel. That attack coincided with a similar onslaught by an equally large Egyptian force along the Suez Canal, suddenly forcing Israel to fight a two- front war.

 Aided by advanced US Military technology the Israeli Army using American Tanks, Helicopters, Fighter Jets and Intelligence destroyed a much larger Arab force.

 OPEC Nations were furious at America taking the side of Israel and helping them so much in the war that they raised the price of oil by 70% and cut the amount of oil they sold to us by 5% a month.  Less gas selling at vastly increased prices created a major energy crisis in America.

In the 1970’s the oil embargo caused massive inflation and practically crippled our transportation systems.

If the OPEC nations felt it warranted, they could virtually cripple the United States from lack of oil. How? Why? What other areas of the economy would suffer?

 How could the United States eliminate this risk?  End dependence on foreign oil?  How?

 Increase oil production here?  How?

 If oil companies knew where more oil was, don’t you think they would drill for it?

 Align with non-OPEC nations?  Who?

 Eight of the countries on the previous chart are OPEC Nations.  One is Russia and not very interested in helping us.  One is China and not very interested in helping us.  Besides, both Russia & China need oil for themselves.  So do Mexico & Canada.

 America is on the top oil producing countries list. So is Canada and Mexico.  But we can only supply ourselves with 1/3 of the oil we consume.

Alternative fuel cars, such as automobiles that run on electricity create more demand for electricity. Environmentalists here in the United States are concerned over increased oil production. Aligning with non-OPEC country would have substantial political fallout.

Most experts recommend combining the first and second solution; thereby having the United States not only explore but actively utilize its’ own oil resources and to produce hybrid automobiles that are affordable to all of the American consumer.