Organization of Arab Petroleum Exporting Countries (OAPEC)
The Organization of Arab Petroleum Exporting Countries (OAPEC) is an intergovernmental organization established in 1968 by Kuwait, Libya, and Saudi Arabia. Its primary aim is to promote the political and economic interests of its Arab oil-exporting member states. Distinct from OPEC, OAPEC emphasizes a shared Middle Eastern political agenda, particularly regarding the use of oil as a geopolitical tool in the context of the Arab-Israeli conflict. The organization gained global attention in 1973 during the Yom Kippur War when its ministers decided to reduce oil shipments to countries supporting Israel, significantly impacting international oil markets. This embargo led to a dramatic increase in oil prices and forced petroleum-importing nations to compete for dwindling supplies, altering the dynamics of the global energy market. The repercussions of OAPEC's actions were profound, affecting energy policies and international relations, particularly between the United States and its allies. Over time, most Persian Gulf oil-exporting nations joined OAPEC, reinforcing its influence in the energy sector.
Organization of Arab Petroleum Exporting Countries (OAPEC)
- DATE: Established 1968
The Organization of Arab Petroleum Exporting Countries profoundly affected international economics and politics in 1973 when it curtailed oil shipments to countries supporting Israel.
Background
In 1968, Kuwait, Libya, and Saudi Arabia founded the Organization of Arab Petroleum Exporting Countries (OAPEC) to advance the political and economic interests of Arab oil-exporting states. Unlike the non-Arab members of the Organization of Petroleum Exporting Countries (OPEC), OAPEC founders shared a Mideast political agenda: the use of oil as a weapon in the Arab-Israeli conflict. Most of the Persian Gulf’s oil-exporting states eventually joined OAPEC.
On October 17, 1973, OAPEC ministers responded to a U.S. decision to resupply Israel during the ongoing Yom Kippur War by agreeing to reduce oil shipments to countries supporting Israel. OAPEC’s action set petroleum-importing states bidding against one another for the oil upon which their economies depended. The price of oil soared, and OPEC was able to wrest control over the international petroleum market from the cartel of private oil companies which had controlled it for much of the twentieth century. By 2024, OAPEC had grown to include eleven countries. Six of those countries also belong to the Organization of the Petroleum Exporting Countries (OPEC). That same year, OAPEC announced that it was restructuring and renaming itself the Arab Energy Organization (AEO). The change reflected the intention to develop more comprehensive energy-related cooperation across the Arab world.
Impact on Resource Use
It took the oil-importing countries nearly three years to adjust their economies to the resultant fourfold increase in the price of oil. The political fallout from OAPEC’s embargo was equally substantial. Japan and most European allies broke with the United States on Mideast policy in order to avoid having their oil shipments curtailed. Energy became a major policy issue everywhere in the developed industrial world.
Bibliography
"History." OAPEC, www.oapecorg.org/Home/About-Us/History#:~:text=OAPEC's%20ESTABLISHMENT,the%20Kingdom%20of%20Saudi%20Arabia. Accessed 30 Dec. 2024.
Kenton, Will. "Organization of Arab Petroleum Exporting Countries (OAPEC)." Investopedia, 11 Nov. 2022, www.investopedia.com/terms/o/oapec.asp. Accessed 30 Dec. 2024.