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Ibrahim bin Hussayn, Regent and Crown Prince of Iraaq, made contacts with several oil producing countries in order to establish an organisation to control the oil prices in the wake of the Second Great War.
In 1951 together with general Mossaddegh, chief of State Government of Persia, Adbul Aziz al-Saud, king of Saudi Arabia, and Maria Luisa, queen of Tejas they created the Community of Petrol-Exporting Nations (COPEN) by the Treaty of Baghdaad. Soon other oil producing countries would join.
King Faisal I al-Saud, of Saudi Arabia, considered that the Arab Community wasn't strong enough to support arab interests and pressured COPEN to admit several arab countries as new member states Libya (1965), the Thousand Emirates (1967) and Maghreb (1972), but failed in the admission of Syria which wasn't considered as an oil producer important enough.
On the other hand Iraaq was expelled from COPEN in 1973 due to the Oil Crisis of Hijra 1393 [1973 CE) being readmitted in 1980 thanks to pressures from Saudi Arabia.
Later other countries joined: Turkestan (1989) and Al-Basra (1995) among others.
Memberstates tended since the beginning to gather in blocks within COPEN. The original COPEN blocks were the "Arab Block" (usually led by Saudi Arabia) and the "Latin-American Block" (which leadership alternated by Tejas and Venezola). Since the admission of Tukestan a third block emerged, the so-called "Pro-Russian Block".
The Oil Crisis of Hijra 1393 (1973 CE)
See main article: Oil Crisis of Hijra 1393
Since the 1950s Iraaqi oil production increased dramatically and in 1973 Iraaq was placed at an impressive third among oil-producing countries. Iraaq was producing too much oil and on the 17th October 1973 (20th Ramadan 1393 for Moslem) oil prices felt almost 20% in a single day. As result the oil producing countries went to a serious economical crisis due to the massive loss of profits. The COPEN member countries were in panic and their heads of state met in emergency in Teheran to debate the crisis. COPEN advised Iraaq to reduce in a substantial way its own oil production so the prices could go to normal. Abdul Karim Qassim simply refused and in his speech he declared:
- It’s time to our partners of COPEN understand that high profits from oil extraction does not mean development. You can buy your fancy luxury cars, private jet planes and heavy armed armies, but you always buy to foreigners. Development can only be achieved when you produce what you need and never when you use the profits from oil to buy it.
Such unexpected reaction left the COPEN member states in shock and they promptly suspended Iraaq from the organisation. Until the end of 1973 oil prices decreased 50% which caused historical minimum oil prices and lots of economical problems among the oil producers and an important time of prosperity among the industrialised countries so as to many poorer non-oil producing countries. To recover the prices COPEN countries were forced to decrease their production but the oil price stayed reasonably low during the next six years.
Production and quotas
In order to keep oil prices high enough COPEN works as a cartel. Each member state is assigned to an oil production quota. There are disputes over these quotas as a higher quota means a higher profit for a country.
Some countries aren't able to produce as much oil as they have right. It is possible a member state to buy part of another's quota in order to be able to increase its oil production. Iraaq bought part of Gabon's and Gold Coast's quotas during the years prior to the Oil Crisis of Hijra 1393.
Nowadays COPEN memberstates own two thirds of known oil reserves and produces half of world's oil. Even so COPEN's influence over the world decreased due to less economical oil dependence. COPEN works nowadays for finding a balanced oil price so both exporters and importers can be satisfied so as advises its member states to diversify their economies in order to avoid future crises.
Between 1951 and 1971 COPEN had a rotative headquarter. In 1971 King Faisal I al-Saud offered to COPEN the building which remains today as organisational headquarter. It's located in Beyruth, Lebanon.
Following the coup which deposed King Faisal I, in 1975, the building was named briefly as King Faisal Building. Such situation was soon changed by pressure of the new suadi arabian powers. The building was then named Ibrahim bin Hussayn Building which was once again changed in 1980 when Iraaq returned to the organisation. Since the it's simply called COPEN Building.
(Uncomplete) list of Secretary-Generals
1963-1973 - Ashraf Lufti (Kuwayt)
1973-1975 - Francisco Parra (Venezola)
1975-1976 - Abderrahman Khène (Maghreb)
1976-1977 - Ali Jaidah (Qatar, Thousand Emirates)
1977-1979 - Omar el-Badri (Libya)
1979- ? - Muhamadu Lukman (Gold Coast)