Before OPEC was created, there were large oil companies that controlled the world’s oil production. They wanted to sell as much oil as possible and did not let governments influence their decisions. Oil-rich countries, especially in the Middle East, wanted more control over the oil that they produced. As a result, Iran, Iraq, Saudi Arabia, Kuwait and Venezuela founded OPEC. In the following years several other oil-producing nations , became members.

In the 1960s, OPEC did not have much power. This changed in 1973 when the third Arab-Israeli war started. The United States and a few European countries supported Israel. As a form of punishment, OPEC nations, influenced by the Arab countries, stopped selling oil to the West. Within the next six years oil prices rose to ten times the price of the early 1970s. OPEC countries became rich with so-called petrodollars; the West sank into deep recession because they needed OPEC’s oil.

Gas station in the United States during the 1973 energy crisis – Pumps closed on an interstate highway
Image: National Archives at College Park,
Public domain, via Wikimedia Commons

In the aftermath of the energy crisis of the 1970s, western countries started looking for alternative forms of energy in order to become more independent from OPEC and the oil-producing nations. In 1986, oil prices dropped to the lowest rate in history. Oil-producing nations lost much of their income. In the 80s and 90s OPEC’s power diminished, often because of conflicts and internal arguments and because member states could not agree on production quotas. Some OPEC countries did not keep agreements and produced more oil, thus lowering prices.

After 2000, oil prices began to rise again and reached an all-time high in 2007. The financial crisis of 2007 and 2008 hit world economy hard and oil prices fell once again. Since the Arab Spring of 2011, prices have gone up and down several times.

In 2016, at a time when oil prices were low OPEC+ was created, enlarging the cartel with other oil-producing countries, including Mexico, Brazil and Russia. Together, OPEC+ controls about 90% of the world’s oil reserves. Saudi Arabia is the most powerful member of the group, because it has the largest reserves. Even though there have been quarrels in the cartel in the last 6 decades it remains a powerful organization.

OPEC and OPEC+ members
Image: Caspian Delta, CC BY-SA 4.0,
via Wikimedia Commons

Exercises

The international community regards these settlements as illegal and the United Nations has repeatedly condemned the Jewish state for building them. The Jewish settlements in the occupied territories are one reason why peace talks between Israel and the Palestinians are at a standstill. Amnesty International and other human rights organizations argue that constructing settlements on the Palestinian territory is a violation of human rights.

Occupied territories
Image (modified) : Karte: NordNordWest, Lizenz: Creative Commons by-sa-3.0 de,
CC BY-SA 3.0 DE, via Wikimedia Commons

More than 700,000 Israelis – about 10% of the total population – live in 150 settlements in the West Bank and East Jerusalem. Some of the settlements are recently built small cities with their own infrastructure, urban services and transportation; others have been built in the suburbs of big cities like Hebron. In 2023 the Israeli government authorized the construction of nine new settlements in the occupied West Bank.

Originally the Jewish settlements were constructed in order to stop Palestinians from obtaining their own state and to establish a buffer zone between Israel and its Arab neighbors.

Settlers have largely come to the region for economic reasons. Israel’s government offers certain bonuses to people who are willing to settle there. Goods produced in the West Bank and East Jerusalem are subsidized by the government. Tax cuts and other economic incentives motivate Israelis to move to the occupied territories. On the other side there are religious fanatics who believe they are returning to their biblical homeland. They regard Arabs as aliens in their country.

Most new settlers enjoy the advantages of their new home. While Israeli settlements offer jobs to Palestinians who would otherwise be unemployed, there is regular tension between settlers and Arabs.

Many settlements are built on the best farming land. Palestinians accuse Israelis of consuming too much water and leaving them only little. Reports of violence on the side of settlers who lash out at Palestinians are not uncommon.

The future of the Jewish settlements is only one issue that needs to be resolved in order to achieve a lasting peace agreement in the Middle East. Other issues are the future of Jerusalem and the borders between Israel and a new Palestinian state.

Ariel – one of the four big settlements in the West Bank
Image: Salonmor, CC BY-SA 3.0, via Wikimedia Commons