tes are Algeria, Ecuador, Gabon, Indonesia, Libya, Nigeria, Qatar, and the United Arab Emirates.6
In its first dozen years, OPEC concentrated on gaining control by its member states of their petroleum resources from the multinational oil companies. As this goal was pursued, crude oil prices were raised gradually and at moderate levels. In 1973, however, OPEC imposed its first crude oil boycott, one result of which was a tripling of crude oil prices from 1970
3J. Paxton, (ed.), The Statesman's Year Book 1989 1990 (New York: St. Martin's Press, 1989), 63.
price levels. Following this show of power, crude oil price increases again slowed for several years. Then, in 1979, OPEC instigated a second crude oil price/supply crisis, which resulted in, among other things, a doubling of crude oil prices from 1974 levels.7
The economic recession which affected most of the western industrialized countries in the early 1980s, together with energy conservation measures introduced in these countries, led to significant reductions in OPEC sales.8 The reduction in crude oil sales curtailed significantly the income levels of the OPEC countries. These reduced income levels, together with the war between two of OPEC's member states Iran and Iraq, led to widespread cheating by some of the member states on both production quotas and price maintenance.9 Retaliatory actions by other OPEC members led to the collapse of crude oil prices in 1986, after which crude oil prices were just under twice the 1970 price level.10
The crude oil price increases of the 1970s caused a mas sive shift of capital from the oil importing industrial coun tries to the oil exporting countries. The key relationship in
7International Energy Agency, World Energy Outlook (Paris: Organization of Economic Cooperation and Development, 1988), 41.
10D. Gately, "Lessons from the 1986 Oil Price Collapse," Brookings Papers on Economic Activity, 2 (1986): 242 243.
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