ABSTRACT
The creation of Organization of Petroleum Exporting Countries (OPEC) represented a major turning-point in the relationship between the producing countries on the one hand, and the oil companies and consuming countries on the other. It was the first attempt by the governments of oil-producing countries to organize themselves collectively. Attempts by the oil-producing countries at co-ordinating their pricing and output policies go back to the mid-1940s, when the Arab League was formed. It is now generally recognized that the successive, unilateral cuts in oil prices by the major oil companies in 1959 and 1960 were directly responsible for the creation of OPEC. The five countries responsible for 80 percent of the world’s exports of oil - Saudi Arabia, Iran, Iraq, Kuwait and Venezuela - met in Baghdad from 10 to 14 August 1960, and on 15 September announced the establishment of the OPEC.
