Manipulation of the petroleum market is not new. John D. Rockefeller with his Standard Oil Trust mastered it between the end of the 19th and start of the 20th Century. Rockefeller and his trust succeeded in controlling virtually all the oil industry in the United States and also dominating the international market. The Standard Oil Trust fixed prices, set production quotas and ruthlessly forced out competitors.
The U.S. Supreme Court in 1911, in the wake of muckraker Ida Tarbell’s investigative articles and book on the Standard Oil Trust, utilized the Sherman Antitrust Act to break the trust up into 34 pieces. ”For the safety of the Republic,” the court declared, “we now decree that this dangerous conspiracy must be ended.”
The most prominent corporate offshoots of Standard Oil today are ExxonMobil, Chevron and ConocoPhillips. The 34 were supposed to operate independently but, critics have long held, there’s been continued collusion: that the U.S.-dominated oil industry went from being a monopoly to a cartel.
With discoveries of oil in the Middle East in the 1930s and with Standard Oil offshoots deeply involved, the Arabian American Oil Company—Aramco—was created in Saudi Arabia in 1944. In the 1970s, the Saudi government began acquiring more and more of a stake in Aramco, taking over full control in 1980 of what is now called Saudi Aramco.
The Organization of the Petroleum Exporting Countries—OPEC—was formed in 1960 to “coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.”http://www.opec.org/opec_web/en/about_us/23.htm
The senior partner in OPEC, now a 12-nation organization, is Saudi Arabia. This figures considering it has the world’s largest proven crude oil reserves at more than 260 billion barrels.
OPEC sets production targets for its member countries. An early and major flexing of OPEC petroleum power, its system of control, came in 1973 with the “oil embargo” or “oil shock” of that year. It was an OPEC effort to punish the U.S. for its support of Israel in the 1973 Yom Kippur War. Other OPEC-induced “oil shocks” have followed.