This Day in the Law
September 14

OPEC Founded (1960)

On September 14, 1960, the countries of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela founded the petroleum cartel called the Organization of the Petroleum Exporting Countries, commonly referred to as OPEC. Since OPEC’s founding it has grown into the most powerful supplier of petroleum in the world.

In the late 1940s, oil exporting countries were competing against each on the open global market in selling their petroleum. This competition led to a struggle to maintain secure profits. As such, Venezuela and Iran took the initiative and approached Iraq, Kuwait, and Saudi Arabia to form a petroleum-based cartel to protect their self interests. After a few years of meetings, debates, and concessions, the five countries agreed to form a petroleum-based cartel.

On this day, September 14, 1960, OPEC was formed in Baghdad, Iraq by the five oil-exporting countries of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela that joined together to protect their rights and control over petroleum production and manipulation.

Since OPEC’s formation, it has been committed to securing profits for its members, maintaining a steady supply of petroleum to the world, and earning a profit for its investors. Over time, OPEC has grown into the most powerful petroleum supplying interest in the world.

In the future, one the main challenges that OPEC — and the world — faces is maintaining a secure supply of petroleum. Because petroleum is a limited resource and the demand for petroleum and petroleum based products will continue to increase OPEC — and the world — faces many challenges in energy creation, distribution, and supply.

Currently, the largest exporters of petroleum include Saudi Arabia, Russia, Iran, the United Arab Emirates, Kuwait, Nigeria, Norway, Venezuela, Algeria, and Mexico. The largest importers include the United States, European Union, China, and Japan. As the world moves into the mid-21st Century, the imbalance between the importers and exporters of the world and how these countries adapt to a changing energy environment will dramatically affect the course of human events.