The first oil shock in the beginning of the seventies:

The Oil of Petroleum Exporting Countries (OPEC) is beginning to assert power over the oil industry. The relative influence of the oil companies diminished whereas the governments of the oil producing countries gained strength. The OPEC realized the value of oil as a strategic weapon.

1970: the OPEC established 55 percent as minimum tax rate.

1971: OPEC mandates " total embargo" against any company that rejects the 55 percent tax rate.

A series of nationalizations followed: Algeria nationalizes 51 percent of French oil concessions, Libya nationalizes British Petroleum concessions.

1972: Iraq nationalizes Iraq Petroleum Company concessions (owned by British, Dutch, American and French oil companies). Libya acquires a 50 percent interest in ENI (Italian) concessions.

1973: Libya nationalizes 51 percent of Occidental petroleum and 9 other concessions from nine big oil companies like Esso.

In October started the fourth Arab Israeli war (Yom Kippur). The OPEC agreed to use the oil weapon in the Arab Israeli war and recommended an oil embargo against unfriendly states.

1974: oil prices rise drastically from $ 2.83 to $10.41!

The nationalizations of oil concessions goes on. Kuwait announces 60 percent government participation in BP gulf concession. Qatar and Nigeria will follow.

1975: Venezuela started with nationalization of oil concessions.

All these drastic changes in the oil industry brought about that western oil importing countries wanted to reduce their dependence on oil from the Middle East. More reliance on coal for power generation, energy conservation, developments of the North Sea oil fields of the UK and Norway. Also a strong increase of research and development in alternative and renewable sources of energy.

1978: was the start of students protest against government of Reza Pahlavi, the Shah of Iran. Uprising of Muslim fundamentalism. As result, the Shah puts Iran under military rule.

1979: was the end of the Shah. He left Iran for vacation to never come back again. Iran drops her oil production. Because of all these political events, the oil price rises from $13.03 in 1978 to $29.75/barrel.

Iran takes western hostages and cancels oil contracts with US oil companies.

1980: trouble starts between Iraq and Iran. September 23 Iraq invades Iran. This triggers off a turn in the oil prices, they go from $29.75 to an all high of $ 35.69.

1981: the Saudis flood the market with inexpensive oil forcing unprecedented price cuts by the OPEC members.

1982: starts with an oil glut that leads to a rapid decline in world oil prices. The OPEC loses control over oil prices.

1983: demand falls because of conservation, use of other fuels and recession. Heavy fighting and casualties in the Iran -Iraq war.

1984: beginning of tanker war. 44 ships were attacked by Iraqi and Iranian warplanes or damaged by mines.

1985: OPEC loses customers to cheaper North Sea oil. OPEC output hits 18 million barrels per day boosting a glut and triggering a price war.

1986: is the year of the oil price crash from $27.77 per barrel in January to $10.34 in August!

Whereas during the regime of the Shah Iran was the favorite of the US. The oily eyes of the US are now directed towards the Saudi's. They jointly have set the agenda for the world price regime by engineering this oil glut. The oil glut resulted in a way out of the global recession. This new situation has some long-term consequences. It made all research and development into alternative energy sources not economically interesting. The dependence on the cheap Middle East oil has led to accelerating depletion of oil. The oil glut may have more terrible long-term consequences than the earlier oil shocks. It made that research and development into alternative energy was cut. The end of the recession has blinded all nations to the accelerated pace of the oil drain. The gulf war brought about that the west has regained control over Middle East. With the consequence that the West, and especially the US, directly controls the guiding mechanisms of the world oil price. The so called theory market mechanisms bringing down the oil prices is a pure myth

1987: the war between Iraq and Iran escalates.

1988: July, Iran accepts a cease-fire from Iraq.

In retrospect, it is cynical that this 8-year war with millions killed on both sides was a war fought with arms supplied by a great number of countries to secure their interests in the rich oil fields in these lands. France became the major source of Iraq's high tech weaponry (to protect French oil interests in Iraq). The Soviet Union was Iraq's largest weapon supply. Israel provided arms to Iran. At least 10 nations sold arms to both of the warring sides. The US objective was not profit from arms trade but much more significant to control the oil resources in the Middle East. Since World War II, the US has succeeded to gain increasing influence on the oil resources at the expense of the British and French companies.

1989: OPEC raises its production to 19.5 million barrels per day

1990: August 2 Iraq invades Kuwait. Oil prices go up from $ 15.69 to $ 20.90/barrel.

1991: January 16 US start air attacks against military targets in Iraq. Crude oil prices drop to $16,59/barrel after having risen 3-5 dollar per barrel during the first half of January. February 28 the war ends. Iraqi soldiers ignite Kuwaiti oil fields (in total 2 billion barrels have gone up in flames)

1992: OPEC production reaches highest level in more than a decade to 25.25 million barrels daily.

1993: oil prices have fallen sharply in 1993. It has microeconomic consequences: US dependence on foreign oil will increase, more oil burned more pollution. Macroeconomic the low price has good effects: lower inflation, better business, and higher cash flows and profits margins, more investment spending. Oil prices are plunging as a result of a combination of OPEC overproduction; a great output of North Sea oil and a weak demand. Only $15 per barrel is paid on the market.

Saudi Arabia helped by the US is now the pivot of the international oil market. In reward for the protection the US has given the Saudi's during the Gulf war, the US can station a large army force in Saudi Arabia.

1994: oil prices maintain their level around $15/barrel

1995: US unilateral embargo for importing oil from Iran.

1996: US impose sanctions on non-US companies, which invest over $40 million a year in energy sector of either Iran or Libya. Following US cruise missile strikes on military facilities in southern Iraq, crude oil prices rise to $22 per barrel

1997: for the first time in four years OPEC increases its production ceiling by 10%.

1998: the oil prices plunged to $12-14/barrel. Asian and Russian crisis, downfall stock markets. Forecast: more oil production from big OPEC countries in Gulf region will result in still lower oil prices for the time being. The price is around the 10 dollars per barrel.

1999: in the town of Wassenaar oil ministers of Saudi Arabia, Iran, Venezuela and Algeria and a representative of the Mexican government reached an agreement. They will reduce the production of oil to more than 2 million barrels a day. Saudi Arabia reduces even up to 500.000 barrels a day. Three countries Non-OPEC countries wish to take part in the reduction of oil production: Mexico, Oman and Norway. Russia is still studying if it will join the group. The total world oil production of 75 million barrels per day will be reduced by 2.5%. The result of this reduction is clear: the price per barrel oil went up from 10 to 15 dollars in a couple of weeks.