ABSTRACT
The oil industry, oil markets and oil policy clearly involve complex issues of economics. However, they are by no means purely economic questions and to view them in terms only of economics and commercial interests is to adopt a distorting and misleading viewpoint. The regulation of oil flows among nations is viewed by all governments primarily as a political function. The political dimensions of oil are nowhere more evident than in the case of Arab oil. During 1859-1950, the oil market was under the complete control of the oil cartel led by the Seven Sisters. Together they dominated and determined the production, refining and marketing of oil. Nationalization of major oil installations began and OPEC was established. Between 1970-1973 is the period during which the balance of power changed in the oil industry. Oil producers gained more power and confidence in their ability to realize their common objectives, whereas the major oil companies lost influence and control.
