Financial Wealth Ideas

The objective of OPEC 1960 is to present a unified position of oil-producing countries in order to limit the impact of major oil companies on the market. But really, OPEC from 1960 to 1973. the balance of power in the oil market could not change. Significant adjustments to the balance of power had suddenly started in October 1973 war between Egypt and Syria on the one hand and Israel on the other. With support from the U.S. to Israel was able to very quickly restore the lost territory, and in November to sign a ceasefire agreement with Syria and Egypt. October 17, 1973. OPEC has opposed U.S. policy, imposing an embargo on oil supplies to that country increased by 70% prices for Western European allies the United States. In one night, barrel of oil has risen in price from $ 3 to $ 5.11. (In January 1974, OPEC raised the price for a barrel to $ 11.65). The embargo was imposed at a time when nearly 85% of American citizens are accustomed to get to the job on your own car. Although President Nixon imposed a strict restrictive measures on energy use, save the situation failed, and for western countries a period of economic recession. At the peak of the crisis the price a gallon of gasoline in the United States rose from 30 cents to $ 1,2. Wall Street reaction was instantaneous. Naturally, in the wake of the oil companies superpribyley stock went up, but all the other shares in the period from 17 October until the end of November 1973 have lost an average of 15%. Dow Jones Index over this period fell from 962 to 822 points. In March 1974 the embargo against the United States had withdrawn, but the effect that it has, not been able to smooth out. For two years, from January 11, 1973 to December 6, 1974 Dow fell nearly 45% - from 1051 to 577 points. Revenues from oil sales to the major Arab oil-producing countries in the 1973-1978 biennium. grew unprecedented pace. For example, the income of Saudi Arabia increased from $ 4.35 billion to $ 36 billion, Kuwait - from $ 1.7 billion to $ 9.2 billion, Iraq - from $ 1.8 billion to $ 23.6 billion In the wake of high oil revenues in 1976, OPEC established the OPEC Fund for International Development - a multilateral financial institution in the field of development. Its headquarters is also located in Vienna. The Fund is designed to promote cooperation between states - members of OPEC and other developing countries. International institutions, whose activities are of benefit to developing countries, and all non-OPEC developing countries can benefit from the assistance fund. OPEC Fund provides loans (on concessional terms), divided into three types: for projects, programs and balance of payments support. The resources consist of voluntary contributions from Member States and the profits derived from investment and lending operations of the Fund. But by the end of the 70's oil consumption started to decline for several reasons. First, the oil market has increased the activity of non-OPEC production. Secondly, there has been a general decline in the economy of western countries. And thirdly, some fruit of the efforts made to reduce energy consumption. In addition, the United States, concerned about possible turmoil in oil-producing countries, the high activity of the USSR in the region, especially after the introduction of Soviet troops in Afghanistan, were ready in case of recurrence of the situation with the supply of oil to use military force. Eventually, oil prices started to decline.