Opec Tehran Agreement 1971

In addition, different consuming countries may be encouraged to attempt to negotiate oil directly with producing countries. OPEC and the Organization of arab Petroleum Exporting Countries (OAPEC), their purely Arab branch, have lifted the temptation of this siren. And the appeal is reflected in a recent statement by a Spanish government official. He lamented that consumer countries are not represented in Tehran`s negotiations and warned that Spain would try to get more oil through formal agreements with governments in the Middle East and North Africa – and thus bypass companies – and pay with increased exports to these countries. However, despite the emotional reactions of 1970-1971, it must be acknowledged that direct negotiations between consumer and producer governments were not attractive either in terms of commercial conditions or security of supply, as evidenced by France`s experience with Algeria. Moreover, in such negotiations, there is always a risk that trade disputes will lead to political confrontations between governments that could disrupt vital oil trade twice. The concession system gave companies the right to explore, own and produce oil in an area. In contrast, nationalization in Russia, Mexico and Iran had handed over ownership of oil to states. Participation or co-ownership was a compromise that many countries were striving for. To ensure market access, Yamani warned against total nationalization. In October 1972, the Gulf States signed a participation agreement with companies, which provides for an immediate participation of 25%, which was to increase to 51% by 1983.

On April 2, 1971, the negotiations of the tripolipoli group led to a 90-cent increase in the price of OPEC oil in the Mediterranean, well beyond that of the Tehran agreement. The Tripoli group included Libya and Algeria, as well as Saudi Arabia and Iraq, with some of their production arriving in the Mediterranean via gas pipelines. The Shah was angry when he felt himself jumped. In this context, an OPEC meeting was held in Caracas in December 1970, which formulated a wide range of demands that the oil companies present an acceptable offer within a provocative period of time and, if not, threaten to act immediately together. When the stage moved to Tehran, negotiations continued between OPEC and a joint industrial group that was negotiating on behalf of all. In February 1971, the Tehran Agreement was extended under the constant threat of OPEC to adopt its demands by the common government and stop production for any company that did not comply. Roughly speaking, the published price for production in the Persian Gulf was increased by 35 cents (compared to 30 cents for Libya) and would increase by about 11 cents per year until 1975. The tax rate has been increased from 50% to 55%. The governments acknowledged that, on the basis of the next round of negotiations on Mediterranean oil, there would be no leap to the demands of the Persian Gulf and that the agreement would last until 1975.

The spokesmen of the producing countries publicly stated in Withal that the increase in public payments does not require an increase in consumer prices, given the increases in the price of products already in force; and it was implied that the stability of tax regimes would depend on future developments in world prices. Enjoying wasted revenues, relatively new revenues and regional influence, Iran has striven to set the stage and illustrate its new political capital. Persepolis, the Shah in October 1971, wanted to celebrate the founding of the Persian Empire 2,500 years ago and put for 100-200 million dollars “one of the largest bashes in history”. Many heads of state were invited and 25,000 bottles of wine imported from France. . . .