Somewhere in suburban America, in October 1973, a man sat in his Chevrolet Impala, inching forward, radio crackling with news he didn't understand. Something about Israel. Something about an embargo. Something about Arabs turning off a tap.
He had never heard of OPEC. By the time he reached the pump—if there was any gas left—he would never forget it.
Thirteen years earlier, in September 1960, five countries met in Baghdad to form an organization that Western oil executives laughed off as irrelevant. Iran, Iraq, Kuwait, Saudi Arabia, Venezuela—they controlled most of the world's oil reserves but received only pennies per barrel while the Seven Sisters extracted their resources and dictated prices from boardrooms in New York and London.
They decided to change that.
It took thirteen years of patient apprenticeship. Learning the industry. Building technical expertise. Understanding that the companies coordinated perfectly while the producing countries competed against each other. Then came October 1973, and the weapon was ready.
Ahmed Zaki Yamani, the Saudi oil minister, announced the embargo with preternatural calm. This was not anger. This was leverage. Oil prices quadrupled. The greatest redistribution of wealth in history, accomplished not by war but by turning a tap.
What followed transformed the world: the petrodollar system, sovereign wealth funds, cities rising from desert sand, an accommodation between oil kingdoms and American power that served both while the rest of the world paid. And now, the existential question: what happens to the world's most successful cartel when the world stops needing what it sells?
This is the story of OPEC—the moment countries with resources decided to control them, and the sixty-year game of cartel dynamics, free riders, and survival that followed.
Episode 98 of Bored and Ambitious.