Case Study - Economic Consequences of Oil Exploitation: OPEC

• 1. Most of the oil traded across the world is produced by the 14 member countries of OPEC - the Organization of the Petroleum Exporting Countries. By controlling how much oil they produce, OPEC can control the price people pay for petrol in fuel stations.
• 2. In 1973, OPEC drastically reduced oil production. They did this to protest at US support for Israel. This vital natural resource was being used to achieve a political end. Europe and the USA experienced fuel shortages. The price of oil rose from $3 per barrel to $12 per barrel, and then to $40 per barrel by 1979.
• 3. The increase in the price of oil had a huge effect on businesses. They suddenly found their transport costs increased. By the 1980s, the world was experiencing a recession.

  Companies tried to cut costs and reduce the number of workers they hired. This led to industrial unrest. The effects of this recession lasted until the 1990s.