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The members of the OPEC countries meet twice a year in order to set the price of oil per barrel.
During the 1950’s and 1960’s oil was cheap, due to the fact that the supply of oil increased at a faster rate than the demand for oil. Then in the 1970’s we saw a reversal of this trend of cheap oil as the world economy boomed leading to demand outstripping supply. In November 1973 things were to change more significantly. Egypt launched an attack on Israel and OPEC members threatened to cut off oil supplies to any country which supported Israel. At this time OPEC members supplied over 60% of the world’s oil and realised that by limiting the production of oil to the pre 1973 production they could quadruple the price of oil...
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