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Since worldwide oil sales are denominated in U.S. dollars, changes in the value of the dollar against other world currencies affect OPEC's decisions on how much oil to produce. For example, when the dollar falls relative to the other currencies, OPEC-member states receive smaller revenues in other currencies for their oil, in turn causing substantial cuts to their purchasing power, because they continue to sell oil in the U.S. dollar.

OPEC decisions have a large influence on world price of oil. A good example of this in action was the oil shock following the Yom Kippur War which led to fourfold increases in the price which lasted five months, starting on October 17, 1973 and ending on March 18, 1974. Also, OPEC nations agreed on January 7, 1975Events January January 1 Watergate scandal: John N. Mitchell, H. Haldeman, John D. Ehrlichman are found guilty of the Watergate cover-up and are sentenced to 30 months to 8 years in jail on February 21 January 5 The Tasman Bridge in Tasmania, Australia, i to raise crude oil prices by 10%.

Unlike many other cartels, OPEC has been successful at increasing the price of oil for extended periods. Much of the success of OPEC comes from the willingness of Saudi ArabiaThe Kingdom of Saudi Arabia is a country on the Arabian Peninsula. It borders Iraq, Jordan, Kuwait, Oman, Qatar, the United Arab Emirates and Yemen, with the Persian Gulf to its north-east and the Red Sea to its west. Al-Mamlakah al-'Arabiyah as-Sa'udiyah to tolerate cheating on the part of other cartel members and to cut its own production when other members go over theirs. This actually gives them good leverage, since with most members at full production, the Saudis are the only ones with spare capacity and the ability to increase supply if needed.

The policy has been successful in the past, causing the prices of oil to rise to levels that otherwise are not reached by raw materials, but only by industry products. However, OPEC's ability to raise prices has some limits. An increase in oil prices decreases consumption and could cause a net decrease in revenue. Further an extended rise in price can encourage systematic behavior changes such as the use of alternative energy solutions or increased conservation.

Leading up to the 1990-91 Gulf WarSee also: 2003 invasion of Iraq. The Persian Gulf War was a conflict between Iraq and a coalition force of 34 nations led by the United States. The war started with the Iraqi invasion of Kuwait in August 1990. The result of the war was a decisive victory, Iraqi President Saddam HusseinSaddm Hussein 'Abd al-Majid al-Tikriti Hussein also spelled Husayn and Hussain Arabic: ; born April 28, 1937 1) was President of Iraq from 1979 to 2003. A rising star in the revolutionary Ba'ath Party, which espoused secular Arab nationalism, economic mod advocated that OPEC push world oil prices up, thereby helping Iraq and other member states service debts.

As of August 20042004 is a leap year starting on Thursday (the link is to a full 2004 calendar), and has also been designated the: International Year of Rice International Year to Commemorate the Struggle against Slavery and its Abolition Elections are to be held in 73 co, OPEC has been communicating that its members have little excess pumping capacity, thereby indicating that the cartel is becoming unable to influence prices for crude oil.