The Prize, Chapter 25 Overview

The Prize, Chapter 25 The Elephants Overview

A large oil field (reserve) is known as an elephant in the oil industry. Due to the discovery of many elephants, worldwide oil boomed, and oil production in the Middle East in particular grew. Worldwide reserves, the amount of oil technologically and economically recoverable, increased and the reserves of the Middle East- the center of gravity for the oil industry at the time- increased significantly. It should be noted that the amount of oil known to exist that may or may not be technologically and economically recoverable is often referred to as a resource. Thus, resources are greater than reserves and some resources become reserves over time as they become technologically and economically recoverable.

The 1950s not only saw the discovery of big elephants, but also the establishment of the Middle East, and its member countries, into an oil powerhouse. It was not easy considering the competing interests and politics. Iran, Japan, Venezuela, and Egypt become key players. All of this was happening while at the same time market disruptions due to manipulation of posted vs market prices and quotas for imports from specific countries caused more repositioning.

A secret set of meetings launched what is now OPEC. A formidable entity in the 1970s and beyond but which got off to a weak start, as we see in the next chapter.