The Rise and Fall of OPEC in the Twentieth Century.

• Author: Fitzgerald, Timothy

The Rise and Fall of OPEC in the Twentieth Century, Giuliano Garavini (Oxford University Press, 2019) 420 pages, ISBN 978-019-883283-6.

Rightly or wrongly, the Organization of Petroleum Exporting Countries (OPEC) is often cited as an example of an economic cartel. OPEC remains salient in contemporary discussions of the global oil market. Yet academic research on whether OPEC actually operates as a cartel largely finds that alternative models better explain observed behavior (e.g., Griffin 1985, Smith 2005, Bremond et al. 2012). Along comes Giuliano Garavini's history of OPEC, tracing the arc of the waxing and waning of OPEC over the course of the 20th century. Garavini is an historian who has laid claim to writing the first complete and professional history of OPEC. He relies almost exclusively on secondary sources, but access to OPEC archival material richens the narrative substantially and fortifies his claims to an initial professional account. Building on his expertise studying global North-South issues, Garavini provides a comprehensive account of OPEC until about 1990. The reader will not confuse Garavini for a professional economist, but his perspective precipitates consideration of the validity of an alternative view of OPEC as an entity other than an economic cartel. He is sympathetic with resource states and antagonistic towards international oil companies and western governments, which certainly took advantage of early arrangements in a way that may have predestined the creation of OPEC or a similar organization.

The chapter-length prologue traces the rise of the "petrostate" in countries around the world. It is clear that Garavini has a particular affinity for and expertise about the case of Venezuela, which serves him very well through the initial formation of OPEC. The important developments in the creation of the international oil industry receive less detailed coverage than one might expect. Though sections on developments in 1928-the Red Line Agreement in the Middle East and the "As-Is" or Achnacarry Agreement that promoted anti-competitive practices--are included. Garavini never identifies the period of domination by the "Seven Sisters" international oil companies as a cartel outcome. From an economic perspective, the parallels in this early period of cartelization and later efforts to nationalize both production and cartel power are clear. This forewarns the reader of Garavini's sympathy for the sovereign governments of oil exporters. There is nothing wrong with that choice of perspective, though it is a bit overplayed when it comes at the cost of bashing alternative perspectives (including a bizarre sideswipe at Daniel Yergin's The Prize, which is relatively strong in this epoch of history). The upshot is that the pre-WWII period receives short shrift, even as it laid seeds that matured into pro-OPEC forces in later years.

The rise of nationalist bargaining power consumes the following chapters, which cover the postwar years through the 1950s. Here Garavini's strengths shine through, as discontent with international oil companies and nationalist sentiments fomented efforts to keep a greater...