Few will mourn the OPEC oil barons, except maybe the oil paparazzi
Idea
Few will mourn the demise of the once-powerful OPEC cartel more than the so-called “oil paparazzi” who helped mythologize the legend.
For the 66 years since a group of predominantly Middle Eastern oil producers founded the Organization of Petroleum Exporting Countries, OPEC has been the embodiment of a cartel in the worst of economic terms.
The original group of five has grown to 12, but the withdrawal of key member the United Arab Emirates (UAE) last week signaled how far the group had fallen.
In its heyday, member countries dominated by OPEC and Saudi Arabia, which account for half of the world’s oil supply, were turning the taps on and off to manipulate the daily price of oil. Classic definition of cartel.
Forget the current crisis, the original “oil shock” came in the mid-1970s, when OPEC imposed a US oil embargo that quadrupled prices and increased inflation, leading to a worldwide recession.
Twice a year, hundreds of journalists gathered at the headquarters in Vienna, or sometimes in a luxury hotel in neutral Geneva, to breathlessly report on the days of negotiations where global oil prices and the economic fate of the world would be determined.
But the most memorable story for the oil paparazzi was not an economic story, but a crime story, one they almost missed.
On December 21, 1975, a group of six terrorists led by Carlos the Jackal and calling themselves the “Arm of the Arab Revolution” raided OPEC headquarters in Vienna, taking 60 people hostage and killing three officials.
But in the pre-cell phone days, it took a while for the seriousness of the story to sink in, as most of the press had taken a break for a long lunch, thinking the meeting was over. It took them a while to understand why things were so quiet after their return; 11 oil ministers were being held hostage with explosives tied to the legs of the conference table.
Eventually half of the hostages, including the terrorists and the Saudi and Iranian ministers, were flown to Algeria, where all remaining hostages were released for a ransom of US$20 million.
It was only revealed years later that Colonel Muammar Gaddafi was behind the attack, making things uncomfortable at future meetings, given that Libya is a key member of OPEC.
This wouldn’t be the last time OPEC meetings became disruptive.
At the beginning of the Iran-Iraq war in 1980, Iranian oil minister Javad Tondguyan was captured by Iraq, so at the next meeting, a huge photo of the missing minister was displayed on an empty chair to remind everyone of his fate.
Some took a different approach to the conflict. UAE oil minister Dr. Mana al-Otaiba was famous for writing poems describing his frustration in negotiations, using poetry to punish member countries that did not meet oil quotas. And this is from 1983:
“I am really distressed, and while OPEC is distressed, OPEC’s great crisis can no longer be suppressed, the market is stagnant, and the price of crude oil is in decline.”
His Praise for OPEC It was a welcome relief after the dry proclamations, but he wasn’t the only colorful character in the cartel.
The most famous rock star of the two decades was the oil minister, the legendary Sheikh Ahmed Zaki Yamani, known to much of the press as “Your money or your life”.
During the siege of 75, Carlos’ main target was Yamani, and he had a chance to survive when the terrorists were bribed to spare his life. He was hated by the West, which blamed him for the devastating oil embargo, and by other Arab countries and OPEC members who believed the Saudi minister acted like a dictator over the rest of the cartel. (In fact, tensions between Saudi Arabia and the UAE continued until the UAE exited last week.)
It’s hard to believe it today, but OPEC meetings also attracted the attention of a strange star. In 1991, actor Larry Hagman was performing in a play in Vienna when a Texas businessman and OPEC observer invited him to meet with ministers. The man who plays the oil baron on TV dallas He arrived in his JR Ewing outfit and posed for selfies with excited onlookers. The next day, newspapers in OPEC countries published the photo with the headline “JR meets OPEC.” (In stark contrast to today’s oil market, JR called on OPEC to raise the oil price to $36 per barrel because the oil glut and collapse in oil prices at the time had hurt Texas so much. They didn’t).
Another celebrity appearance at an OPEC conference in the ’80s was hardly planned. While US journalists were following a minister up an escalator, they saw notorious businessman Mark Rich land next to them, and a mad scramble ensued as they tried to catch him. Rich had been living illegally in Switzerland for 20 years after breaking US laws while trading oil with Iran during the embargo. The man who founded Glencore was eventually controversially pardoned by Bill Clinton.
This century has not been kind to the cartel. The shale oil boom in the US has seen the country become energy self-sufficient, and in 2016 OPEC entered into an alliance with Russia to bolster these figures.
Without the UAE, OPEC still controls about 30 percent of the world oil market, but its influence continues to wane. But the cartel is no longer what it used to be; Ask the poor people.
Janine Perrett is a Sydney writer who covered OPEC meetings in the 1980s for Australian newspapers.
Janine Perrett is a journalist, broadcaster and commentator. He is the former business news editor of The Sydney Morning Herald and has worked as a reporter in the UK and the US.
