What where the policies adopted for combating their effects? Where these policies deemed appropriate or adequate? What role has OPEC played in the wide fluctuations of international oil? Seeking to address these questions and many more with respect to the role of geopolitical affairs on the international oil sector, this essay will explore the Oil Crises of the 20th century (1973 to 1974 and then 1979-81). With an emphasis on international events and the role that that they play in the international supply of oil, we will begin with a quick overview of OPEC and expand our analyses of these two major events (Aldeman 2003).
What is OPEC? OPEC, the Organization of Petroleum Exporting Countries, is an international trade cartel composed of 12 oil producing countries. These 12 countries account for two-thirds of the world’s total reserves and close to 40% of the world’s total oil production. Due their significant share of the world oil market, OPEC plays a huge role in global oil production and the determination of oil prices (Mouad 2006; BBC 2008). During the First Oil Crisis, the Arab countries of OPEC established OAPEC, Organization of Arab Petroleum Exporting Countries, an organization which played an important role in the oil shocks of the early 1970s. It is to this event that we now turn as we explore the geopolitical factors which precipitated this international crisis.
A Jewish state in the Middle East remains a divisive and controversial subject and the Palestinian-Israeli conflict remains one of the most enduring and complex disputes of modern times. After two major wars, in 1948 and again in 1967, Israel and her neighbors entered into another armed conflict in 1973, this one however, had enormous geopolitical and economic ramifications. On Yom Kippur 1973 – the Day of Atonement, the holiest day of the Jewish year - the concerted armies of Egypt and