AI Summary
5 min readIn 1959, a group of oil ministers from Venezuela, Saudi Arabia, Kuwait, Iraq, Egypt, and Iran drove in separate cars to an empty yacht club outside Cairo to avoid being spied on. They met under a tree on the banks of the Nile, in what one biographer described as a "James Bond atmosphere." The men were furious. The seven largest Western oil companies—Gulf, Shell, Texaco, and others, collectively known as the Seven Sisters—had just unilaterally cut the price they would pay for the oil these countries produced, slashing the royalties those countries received. The ministers decided to band together and wrest control back. That secret meeting under the tree was the birth of OPEC, the Organization of the Petroleum Exporting Countries.
The midwife of OPEC
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What you'll learn
- 1 (00:22) **Listener Question Kicks Off the Episode** - Planet Money receives a question from listener Valerie Berecki, who is embarrassed to ask a basic question about OPEC.
- 2 (05:08) **What OPEC Is and Why It Was Created** - The episode defines OPEC as a group of oil states that collectively decide how much to pump, born from a secret meeting under a tree on the banks of the Nile in 1959.
- 3 (06:48) **Wanda Jablonski: The Midwife of OPEC** - The story of OPEC's founding is told through the lens of journalist Wanda Jablonski, who played a key role in facilitating the secret meeting.
- 4 (10:03) **The Secret Meeting Under a Tree** - The oil ministers, fearing spies from the Seven Sisters, held a clandestine meeting outside Cairo to agree on forming their own organization.
- 5 (11:43) **OPEC's Early Years: A Grievance Organization** - In its first decade, OPEC was more of a consultative body than a powerful cartel, struggling to negotiate with the major oil companies.
- 6 (13:03) **1973 Oil Embargo: The Breakout Moment** - The 1973 Arab-Israeli war provided the catalyst for OPEC to discover its power to control oil prices by limiting supply.
- 7 (15:09) **The Core Challenge: Keeping the Cartel Together** - OPEC's power relies on members collectively sticking to production cuts, but enforcing cooperation over time is extremely difficult.
+ Full timestamped outline available in the app
Show Notes
“It would be so awesome if you guys could do an episode explaining OPEC to us,” she emailed us. She wanted to know: why does OPEC exist? Why does it limit the supply of oil? And now that the United Arab Emirates has dropped out, what will happen to gas prices?
We love when our listeners write in (and send us voice notes!). The simplest questions can reveal how the complicated web of the economy works.
On our latest: we answer our listener’s questions… and the questions behind those questions!
Related episodes:
• Chevron, Venezuela and the Paradox of Plenty
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This episode of Planet Money was produced by James Sneed with help from Willa Rubin. It was edited by Marianne McCune, fact-checked by Sierra Juarez, and engineered by Robert Rodriguez. Alex Goldmark is our executive producer.
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