🌍 Formation of OPEC: When Oil Nations Took a Stand
In the late 1950s, the oil-producing nations of the Global South had grown restless. For decades, Western oil companies had dictated the rules—setting prices, determining output, and collecting the overwhelming share of profits. Governments in the Middle East and Latin America watched as tankers carried away their crude, only for decisions about it to be made thousands of miles away in corporate boardrooms.
But in 1960, something extraordinary happened. The Formation of OPEC—the Organization of the Petroleum Exporting Countries—marked the moment when these nations said: “No more.” It was the first serious attempt by producer states to reclaim sovereignty over their own natural resources.
⚖️ A Cut Too Deep
The spark came suddenly.
In August of that year, the major Western oil companies—chief among them Standard Oil, Shell, and BP—unilaterally slashed the posted price of oil. This maneuver directly cut into the revenues of exporting nations like Iran, Iraq, Saudi Arabia, Kuwait, and Venezuela. There had been no warning, no negotiation. Just a notice—followed by a deep financial wound.
To the producers, it wasn’t just about money. It was about dignity. About power. About a voice at the table.
🛢️ The Baghdad Gathering
In response, five of the most significant oil-exporting countries sent delegates to Baghdad, where they met from September 10 to 14, 1960. The outcome was historic: the birth of OPEC.
Led by figures like Juan Pablo Pérez Alfonzo of Venezuela and Abdullah Tariki of Saudi Arabia, the organization was created to coordinate oil policies, defend members’ economic interests, and eventually influence global production and pricing decisions.
The idea was simple, but revolutionary: if oil-exporting nations could act together, they could stop being price-takers and become price-setters.
🔄 Shifting the Power Structure
The Western oil order had always been fragmented—each producing country dealing alone with massive oil firms backed by powerful governments. OPEC changed that. Suddenly, five nations had created a united front.
The group’s early moves were modest. They did not immediately try to seize control of oil infrastructure. But they did start renegotiating contracts, demanding higher royalties, and asserting the right to manage their own output. And they began attracting new members—Libya, Qatar, Indonesia, Nigeria, and others—growing from five founders into a rising force.
💥 A Quiet Revolution Begins
At the time, few in the West saw OPEC as a serious threat. The organization had no military, no territory beyond what its members already possessed. But what it did have—what it quietly consolidated—was collective control of much of the world’s oil reserves.
And as energy demand soared in the postwar industrial boom, that control would become priceless.
The Formation of OPEC wasn’t just a regional pact—it was the first major economic realignment between the Global South and the industrialized world. It marked the beginning of an era where oil producers would no longer accept marginal roles in a system built on their resources.
⏳ The Road to Real Power
OPEC’s birth was not a revolution in the streets, but in the economics of sovereignty. It set in motion a new energy order—one that would erupt in full force in the 1970s, when oil producers would flex their muscle in dramatic, global fashion.
But it all began in Baghdad, in 1960, with a quiet meeting, a bold idea, and a single, unified demand: this is our oil—let us control it.