In the 1980s, OPEC began setting production targets for its member nations; generally, when the targets are reduced, oil prices increase. This has occurred most recently from the organization’s 2008 and 2016 decisions to trim oversupply. OPEC’s influence became most visible during the 1970s oil crises. Political tensions in the Middle East, including the 1973 Yom Kippur War, led OPEC members to use oil as a political and economic tool.
By cutting production and imposing an oil embargo on countries supporting Israel, OPEC caused oil prices to skyrocket, dramatically impacting global economies. This period cemented OPEC’s role as a major player in international politics and economics. It demonstrated that collective action among oil-producing nations could influence energy prices, global trade, and even geopolitical dynamics.
