OPEC and the 1970s Oil Crises: Lessons for the 2021 Global Energy Crisis

With Russia threatening to turn off the supply of vital gas and oil, governments all over the world conceive rationing plans that inevitably bring back memories of the 1970s oil crisis. Using a qualitative approach, including data from secondary sources, printed and digital material gathered from websites, books, journal articles, and publications of international organizations, this chapter analyzes, through the lens of a historical perspective, OPEC’s strategy and behavior during different crises with a focus on the Middle East members (Saudi Arabia, Iran, Iraq, United Arab Emirates, and Kuwait) who play a major role in the organization. The Arab oil embargo of 1973 and the oil market chaos triggered by the 1979 Iranian Revolution are attentively examined, trying to identify their relevance and lessons offered for the 2021 global energy crisis. This chapter shows that, even though OPEC’s role in the international oil market has long been criticized, it still plays a significant influence in coordinating petroleum policies, with important economic consequences for the Middle East region; nonetheless, it also reveals the challenges confronted by OPEC with the determination of the industrialized nations to reassess their dependence upon oil in the Middle East and to operate far-reaching changes in the energy policy, including efforts for improving the energy efficiency and an increased use of renewables.