Opinion
Few will mourn the demise of the once powerful OPEC cartel more than the so-called “oil paparazzi” who helped mythologise the legend.
For 66 years, from when a group of predominantly Middle Eastern oil producers formed the Organisation of Petroleum Exporting Countries, OPEC was the personification of that most evil of economic terms – the cartel.
The original group of five grew to 12 but it was the withdrawal last week of key member the United Arab Emirates (UAE) that signalled how far it had fallen.
In its heyday OPEC, which accounted for half the world’s oil supply and member countries – dominated by Saudi Arabia – would turn the taps on and off to manipulate the daily price of oil. The classic definition of a cartel.
Forget the current crisis, the original “oil shock” came in the mid-1970s when OPEC instituted a US oil embargo that quadrupled the price and sent inflation soaring, sparking a worldwide recession.
Twice a year, hundreds of journalists would gather at the Vienna headquarters, or sometimes a luxury hotel in neutral Geneva, breathlessly covering the days of negotiations that would determine global oil prices and the world’s economic fate.
But for the oil paparazzi the most memorable story wasn’t an economic one, but a crime one – and a scoop they almost missed.
It was December 21, 1975, when a group of six terrorists led by Carlos the Jackal and calling themselves the “Arm of the Arab Revolution” stormed the OPEC headquarters in Vienna taking 60 hostages and killing three officials.
But it took some time for the gravity of the story to break in the pre-mobile phone days, as most of the press had adjourned for a long lunch thinking the meeting was winding down. It took a while after their return for them to work out why things were so quiet – that the 11 oil ministers were being held hostage with explosives strapped to the legs of the conference table.
Eventually the terrorists and half the hostages, including the Saudi and Iranian ministers, were flown to Algeria where all remaining hostages were released for a $US20 million ransom.
It was only discovered years later that Colonel Muammar Gaddafi was behind the attack, which made things uncomfortable at future meetings, given Libya was a key member of OPEC.
It wouldn’t be the last time OPEC meetings became uncomfortable.
At the outset of the Iran-Iraq war in 1980 the Iranian oil minister, Javad Tondguyan, had been 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 conflicts. UAE oil minister Dr Mana al-Otaiba was famous for writing poetry about his frustration with negotiations, using verse to chastise member nations who were not meeting their oil quotas. This one from 1983:
“I am truly troubled and with OPEC distressed, OPEC major crisis is no longer suppressed, The market is stagnant and the price of crude oil depressed.”
His Odes to OPEC were a welcome relief from the dry communiques but he was not the only colourful character at the cartel.
The most famous rockstar oil minister for two decades was the legendary Sheik Ahmed Zaki Yamani – known by most of the press as “Ya-money-or your life”.
It was Yamani who was the main target of Carlos during the ’75 siege and he was lucky to survive when the terrorists were bribed to spare his life. He was loathed by the West who blamed him for the destructive oil embargo and by the other Arab nations and OPEC members who believed the Saudi minister acted like a dictator over the rest of the cartel. (Indeed, the tensions between Saudi and the UAE continued right up until the latter exited last week.)
Hard to believe today, but the OPEC meetings attracted the odd star as well. In 1991 actor Larry Hagman was performing in a play in Vienna when a Texas businessman and OPEC observer invited him along to meet the ministers. The man who played an oil baron in TV’s Dallas turned up in full J.R. Ewing regalia and took selfies with the excited ministers. The next day papers in OPEC countries ran the photo under the headline “J.R. meets OPEC”. (In stark contrast to today’s oil market, JR urged OPEC to lift the price of oil to $US36 a barrel as the then oil glut and collapse in oil prices was so damaging to Texas. They didn’t).
Another celebrity sighting at one OPEC conference in the ’80s was not so planned. As the US journalists were following one minister up an escalator, they spotted notorious businessman Mark Rich descending next to them and a mad scramble ensued as they tried to catch him. Rich was a fugitive in Switzerland for 20 years after he broke US law trading oil with Iran during the embargo. The man who founded Glencore was eventually and controversially pardoned by Bill Clinton.
This century has not been kind to the cartel. The US shale oil boom saw it become energy self-sufficient and in 2016 OPEC entered an alliance with Russia to bolster the numbers.
Without the UAE, its influence continues to wane although OPEC still controls nearly 30 per cent of the world oil market. But the cartel is not what it used to be – just ask the poor paps.
Janine Perrett is a Sydney writer who covered OPEC meetings in the 1980s for Australian newspapers.
Janine Perrett is a journalist, broadcaster and commentator. She is a former business news editor at The Sydney Morning Herald and has worked as a correspondent in Britain and the US.