October 17 - OPEC Cuts Oil Exports

This Day in History: 17 October 2020

 

17 October 1973

 

47 years ago, today, the Organisation of Petroleum Exporting Countries, consisting of many oil producing Arab nations, announced their decision to cut oil exports to the United States and other nations that militarily helped Israel during the Yom Kippur War. According to OPEC, exports were to be reduced by 5% every month until Israel evacuated the territories gained in the 1967 Arab-Israeli war. However, Israel refused to withdraw. In December, a full oil embargo was imposed against the United States and many other countries, initiating a serious energy crisis in the United States and other nations dependent on Arab oil.

 

In 1960, OPEC was founded by Saudi Arabia, Iran, Iraq, Kuwait and Venezuela with the objective of raising the price of oil. They had little impact at first, but by the early 1970s, an increase in demand and the decline of US oil production gave it more popularity. In 1974, the embargo was lifted once Henry Kissinger, the US Secretary of State, negotiated a military disengagement between Syria and Israel. Nevertheless, oil prices remained very high. By the 1980s, the influence of OPEC on the world, however, began to decline, as Western nations were successfully exploiting alternate sources of energy, like coal and nuclear power.

 

Want to find out more about OPEC? Click here for more information, or here for more about the 1970s energy crisis.