Key events in OPEC history

CARACAS, Venezuela (Reuters) -- OPEC heads of state and government on Wednesday begin their first summit for 25 years, marking 40 years of the 11-nation export group's existence.

Following is a chronology of the Organization of the Petroleum Exporting Countries, which now comprises Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela:

1960 - OPEC founded in Baghdad by Iraq, Iran, Kuwait, Saudi Arabia and Venezuela to win better return for oil producers whose output is controlled by Western multinationals.

Membership grows steadily in 1960s and early 1970s.

Towards end of 1960s, OPEC members seek greater control of their resources, nationalizing many Western companies active in their countries and striking concessions or negotiating accords that allow host governments more control of pricing.

1973 - An Arab oil embargo during Arab-Israeli war disrupts oil flows and triggers panic buying.

OPEC countries wrest pricing fully from Western multinationals in first "Oil Shock" and prices soar from around $2.50 a barrel in January 1973 to $11.50 by 1974.

1975 - International guerrilla Carlos and five accomplices kidnap 11 OPEC oil ministers including Saudi oil Minister Sheikhh Ahmed Zaki Yamani in raid on Vienna meeting, shooting three people dead. Ministers flown to north Africa and freed.

1979 - Revolution in Iran, then second biggest OPEC seller after Saudi Arabia, creates second "Oil Shock."

Supply never runs out, but Japanese buyers lead new scramble for stocks on fears it might. Price of Arab Light leaps to around $36 a barrel by January 1980.

1980 - Iraq invades Iran. By end of year, North Sea crude Forties stands at new high of $40, peak not to be exceeded for 10 years.

In 1970s and 1980s high prices lead West to produce more of its own oil from areas like North Sea. Global recession and fuel-saving in reaction to high-cost oil mitigates world petroleum demand and creates glut.

1986 - Prices collapse as oversupply deepens. OPEC finally abandons fixed pricing structure and cuts prices to try to win back market share. Brent drops to low of $8.75 a barrel. OPEC subsequently introduces production quota system.

1990-1991 - By mid-1990 prices drift around $15 a barrel before Iraq's invasion of Kuwait and new Gulf war sends them to all-time high of $41.90 in October.

1991 - U.N. sanctions permit Iraq to export oil to buy food and medicines under renewable contracts, an option Baghdad takes up only in December 1996.

OPEC members settle late in 1993 on agreed quotas. But they do so within overall ceiling that proves too high at time when global recession is crimping petroleum demand.

1997 - OPEC meeting in Jakarta agrees 10 percent rise in output ceiling as Asia enters economic downturn, first ceiling increase in four years. Prices start to slide.

1998 - Prices collapse, Brent dipping under $10 in December and again in January 1999. Other factors include mild winter and increases in U.N.-monitored Iraqi exports.

OPEC, with non-OPEC producers such as Mexico and Norway, agrees output cuts in March and June but price slide goes on.

1999 - OPEC agrees third and final round of output cuts in March. Price recovery starts.

2000 - OPEC raises output in March in failed bid to cool overheated markets. Further output increases agreed in June and September also fail to make much dent in rally that pushes Brent back to mid-$30s for first time in decade.

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