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What is OPEC?
OPEC, the Organization of Petroleum Exporting Countries, formed in 1960 with the five founding nations of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. By 1971, Qatar, Indonesia, Libya, United Arab Emirates, Algeria, and Nigeria had also joined the group. Since its founding, all member countries experienced a decline in the purchasing power of a barrel of oil, even though demand remained high. This decline stopped in March 1971 however, when Texas Railroad Commission set proration at 100%, which meant that oil producers in Texas were no longer limited by the amount of oil they could produce. This shifted the power to control oil prices from the United States to OPEC.
Find out how oil prices changed as a result of this power shift by reading about the 1970's oil crisis .
Annual Average Crude Oil Prices ($/barrel), Average Nominal Price:
1946-1971:
Image: JPG
Excel File: XLS
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Annual Average Crude Oil Prices ($/barrel), 2005 Inflation Adjusted:
1946-1971:
Image: JPG
Excel File: XLS
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Sources:
Williams, James. 2005. "Oil Price History and Analysis". WTRG Economics.
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