The Concise Oxford Dictionary of Politics (189 page)

BOOK: The Concise Oxford Dictionary of Politics
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OPEC
(Organization of Petroleum Exporting Countries)
OPEC, originally the inspiration of Venezuela and Iran, is an intergovernmental organization comprising Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, United Arab Emirates, Iran, Nigeria, Venezuela, Gabon, and Indonesia (Ecuador withdrew in January 1993 as a result of OPECs refusal to raise its production quotas). OPEC was founded in 1960 in reaction to the pricing and production policies of the big oil companies in 1959 and 1960. OPEC made it possible for producer countries to attain higher prices by driving the Western companies onto the defensive and ultimately taking control of most of their holdings in the region.
Throughout most of the 1960s, a surplus in oil production contributed to a downward push in real oil prices. In these conditions, the objective pursued by OPEC was to prevent a further decline in prices. By 1970, market conditions began to produce an upward trend in oil prices. With the October War of 1973, a revolutionary change in the oil market occurred when Arab oil producers of OPEC—the Organization of Arab Petroleum Exporting Countries (OAPEC)—imposed an oil embargo upon the United States and the Netherlands for their support of Israel. This was followed by the quadrupling of the price of oil by OPEC to US$10.84. These developments continued through to 1978 during which time many of the OPEC governments nationalized oil companies operating on their territory. OPEC now had the ability to set oil prices and determine production and sales policies.
This change in oil prices contributed to a watershed in world economic affairs. Arab oil monarchies were in receipt of vast petrodollar reserves which they invested mainly in Europe and the United States. This dramatic increase in incomes financed the great economic boom of the 1970s and early 1980s in the Middle East while contributing to a slower, more erratic economic growth in the industrialized world. But the second oil price rise of 1979–80 to nearly US$40 a barrel resulted in falling world prices, in particular in commodity prices. Oil prices soon began to decline until the price collapse in 1986 to a low at one point of $8, rising to $18 in 1987.
After the use of oil as a political weapon in 1973–4, the power of OPEC was its ability to set the price of oil that consumers would have to pay. OPEC itself had and has no internal unity except on the matter of setting the price of oil to their advantage—and even here unity is not always evident. Saudi Arabia is the only oil producer that can raise or lower its oil production by millions of barrels per day without seriously affecting its own economy or polity—at least until the Gulf War of 1991. For a time, it would attempt to discipline members who did not adhere to their agreed quota by threatening to raise or lower its own production. This policy utterly failed in the 1980s. From 1982, the market was flooded by oil. When in 1986, the year of the price collapse, an OPEC conference finally met to set a maximum level for output and agree to a quota system for all members except Iraq in order to reverse the decline and stabilize the price at $18 by 1987. But when the Iraq–Iran War ended in 1988 and both Iraq and Iran came back into the oil market, the agreed quotas were undermined. Between 1988 and 1990, the year Iraq invaded Kuwait, the quota system collapsed. During the Gulf War, Saudi Arabia had increased its production by 3mbd (million barrels per day) to 8.5mbd and after the war refused to return to its prewar level. A decline in the price set in because of a virtual production free-for-all by the members. As many of the OPEC members were in great need of revenues, there emerged the problem as to how they would share the burden of reducing production or arriving at prices that would keep oil attractive to an increasingly environmentally conscious industrialized world which is preparing to further trim its use of oil by 1999. Saudi Arabia and Iran had been competing with each other for market share pending the return of Iraq to production. Both were in great need of revenues. Kuwait has not felt obliged to reduce its production while it is recovering from the war. Indonesia, Algeria, and Nigeria, as medium-sized producers with great need of revenues, have not felt that they should be asked to restrain their production. Small producers have increasingly felt that it is not equitable for them to be asked to cut their production.
OPEC has brought great changes in the world economy and great benefits to its members but has not as yet developed a formula for co-operation amongst its members.
BAR 
open primary
Primary election at which voters are free to choose which party they wish to select the candidate for. Rarely used, as supporters of one party can attempt to obtain the nomination of the weakest candidate of an opposing party by voting in their opponents' primary.
open rule
opinion polls
Surveys designed to discover the attitudes and/or intended or recalled behaviours of political actors; these may be leaders, legislators, bureaucrats or, more familiarly, electors. Such polls may be conducted by a variety of means, including telephoning and face-to-face interviewing, and are of two main types. The first, the random poll, entails selection on the basis that each member of the target population has a known probability of being chosen; because this method yields statistics with a sampling distribution which is approximately normal, the range of error can be quantified. The second is the quota poll, whereby an attempt is made to replicate the social distribution of the population among the sample on the assumption that, if it is representative socially, it will be similarly representative in its political views. Both types of poll, although mainly quotas, are used by market research firms to assess public opinion, especially of course during election campaigns when they are used both to inform the strategies of the competing parties and to try and predict the outcome. In general, over the period since 1945, the UK polling organizations have had a good record in predicting results, but the predictions of quota polls deteriorated sharply in the 1990s. See also
survey research
.
ST 

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