Why is OPEC no longer the political power it was in the 1970s and 1980s? Or is it?

Answer 1

OPEC was 'given' a lot of the power they held by the rest of the oil consuming nations, mainly the US. I recall the international 'panic' when Americans were sitting in line to buy five gallons of gas. The world didn't stop turning, and those nations that could, began to resolve the situation of the OPEC Threat, as some called it. Other nations that produced oil were given priority for development by the American based oil companies, Mexico, South America, South East Asia, and Canada all got a lot of attention, The US even built the Alaskan Pipeline to alleviate shortages, and we and other nations began to store oil in a reserve, in the event that supplies were actually critically short.

All that being said, OPEC members could not stay united as tightly as they wanted to. Some had wars to pay for, (8 years between Iran and Iraq) and selling oil at whatever price they could get was the method to garner the funds needed. The enhanced production from non OPEC countries came on line realatively fast, and are still being enhanced. In addition, the real hard line OPEC nations found out that the oil production they enjoyed could not be sustained as the drilling and pumping stations became aged and could not produce. They had no expertise to fix all this foreign equipment (US and French mostly) so to stay in business, certain 'concessions' had to be made.

The OPEC nations can still influence oil prices with supply and all, but nothing like they once could. If the US were forced to, it could produce known assets that at the moment are not considered environmentally proper.

Answer 2

The US was weakened militarily from its defeat in the Vietnam War. Israel thought that restricting oil to the US on 2 occasions would be enough for the US to take a step back from world events. Jimmy Carter boycott the 1980 Olympics rather than send soldiers to Afghanistan to counter the Russians. In 1983, the death of 241 Marines in Lebanon was the sign that the US would respond to terrorism rather than disruptions in the oil supply. As you saw with Katrina and the current price swings - gasoline has gone above $2 a gallon which is not even close to the inflation adjusted price of $4 a gallon. Gas prices will catch up with inflation at around $4.50 - $5 a gallon. Did I forget to mention the strength of the Euro relative to the dollar? Since the dollar is stronger than the Euro and the Euro is equal to $1.50 US - expect to see US gas prices between $6.75 - $7.50 a gallon. OPEC still has power but the US has no power to counteract it.

Answer 3

OPEC is not the power it once was.

OPEC members now have more diverse interests than before. What do South American nations care about Israel & Palestine (even less than the Arab OPEC powers really do)?

Answer 4

It's achieved its goal. High oil prices.