OPEC’s successful failure : the analysis of OPEC’s political decline in the late 1970s

This thesis addresses the political decline of the Organization of the Petroleum Exporting Countries associated with the Iranian Revolution and the ensuing economic crisis. As the oil crisis in 1973-1974 elevated OPEC to the status of the dominant oil administrator, the crisis of 1979 undermined it. OPEC’s political influence, rooted in its position on the oil market, was, therefore, on a downhill. The effects of the Iranian events were two-fold. Firstly, the consumer panic led to a precipitous increase in oil prices which OPEC failed to handle letting its member-states take full advantage of it. Ceding the control over prices to the market forces, OPEC inadvertently undermined the purpose it was created for earning itself a bad fame on the international arena. Secondly, the Iranian Revolution intensified intra-group tensions and led to the significant erosion of the collective solidarity crucial for its cooperative behavior. Together, these factors rendered it impossible for them to pursue its foreign policy of the New International Economic Order and continue to be a champion of the Third World in the struggle against economic colonialism and unequitable development.