OPEC

OPEC is a cartel (alliance) of 12 countries - Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela - that export petroleum. They control 50% of crude oil exports and can therefore change the supply of crude oil in order to manipulate prices.

The 1973 oil crisis

Much of the world was dependent on oil imports from OPEC countries, and so OPEC has great control over prices. They have been criticised for using the "oil weapon", and initiating the 1973 oil crisis by implementing embargoes.

The 1973 oil crisis started with a conflict between the Arab countries and Israel. The United States were supporting Israel and as the Arab countries knew that the US depended on them heavily for their oil, they decided to use this as a weapon to punish the American's for the support they were showing to Israel. They implemented an oil embargo against the US and Western Europe.

The oil embargo lasted five months, from October 17 1973 to March 18 1974 and it caused prices to increase fourfold.

OPEC can control the price of oil because they have a monopoly in the oil market. This means they are the main suppliers of oil and can therefore reduce or increase supply to the world market. Basic economics will tell you that a reduction in supply will cause the price to increase whilst an increase in supply will decrease the price. 

Evidence for the control OPEC has over oil production

When terrorist attacks in the Middle East disrupted oil supply, this in turn affected prices.