In the US Opec is viewed as a cartel and therefore something to be smashed

Energy economist

Some analysts are predicting a world energy crisis of a scale not seen since the early 1970s, just as the leaders of the Opec nations gather in Venezuala for a historic 40th anniversary summit.

But how much power does Opec truly wield in the 21st century?

And how would it hope to gain from another oil crisis?

Untrustworthy

Opec is often portrayed in the West as a greedy and untrustworthy cartel, cynically manipulating the price of oil.

Opec members

Middle East

Saudi Arabia Iraq UAE Kuwait Iran Qatar

Africa

Nigeria Libya Algeria

Asia-Pacific

Indonesia

South America

Venezuela

Its 11 members include some of the world's major oil-producing nations, including Saudi Arabia, Iraq, Iran, Kuwait and Nigeria - but not Russia, Norway, Britain and the United States.

Many of the so-called 'oil-rich states' are rich in very little else. Crude oil is their only export, making them uniquely vulnerable to world oil prices.

So when prices fell to $10 a barrel in 1998, it had a devastating effect on their economies.

Tony Scanlan, of the British Institute of Energy Economics, says: "In the US Opec is viewed as a 'cartel' and therefore something to be smashed - which is not a helpful way of thinking about it.

"The one thing the Opec countries all have in common is their absolute reliance on one product - oil."

According to Mr Scanlan, the Opec countries can not afford to treat oil "as just another commodity".

"When the price falls it creates real pain. They have to feed and give welfare to their people, the same as Western countries", he says.

Squabbling

Heavy security surrounds Opec meeting

Backed into a corner by depressed prices, Opec countries started to cut back production in an attempt to drive up prices.

Unlike during previous attempts to drive up prices, this time there was little squabbling and few attempts to cheat on agreed production levels.

Experts in the West were surprised at how well-disciplined the action was, and now expect Opec countries to keep prices high as long as possible.

But Opec's hand is not as strong as it once was. Member countries control much less of the world's total oil supplies than they did in 1973, during the first oil price shock.

Opec history

1960 - Opec founded by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela 1965 - Moves from Switzerland to new headquarters in Vienna, Austria 1973 - High oil prices cause world economic crisis 1990 - Iraq anger at Kuwait over-production sparks Gulf War 1998 - World oil price drops to $10 a barrel 2000 - Opec puts squeeze on production to boost prices

This was graphically demonstrated last week. When the United States decided to release 30m barrels of oil from its emergency reserves, prices tumbled immediately - even though this amount would keep the world going for just 12 hours.

No further production boost

Venezualan president Hugo Chavez, the host of this week's Opec conference, has said there will be no discussion of increased production.

But Mr Scanlan thinks the subject will be hard to avoid.

"They will have to discuss it, because if they don't the traders will have it all their own way," he says.

"Collectively, there will be a memory of 1973. A lot of them are the same people and they don't want a repeat of the oil crisis."

Lawrence Eagles, oil analyst for GNI brokers, says the Opec members have little room to manoeuvre on prices.

"Opec has the strength to raise prices, but it doesn't have the capacity to lower them at present," he says.

Venezuela is largely a back-slapping exercise ... there will be no announcements on increased production

Oil analyst

"World demand has grown at a far greater rate than anyone anticipated."

He adds: "I think Venezuala is largely a back-slapping exercise to congratulate themselves on their success over the last 18 months.

"There is unlikely to be another announcement on increased production."

Broad church

And even though Opec managed to act as one, the organisation is still a surprisingly broad church, says Ruba Husari, Middle East correspondent of Energy Intelligence.

"The members still have a spirit of co-operation. It has not vanished completely now that the prices are up."

"Saudi Arabia, for example, has taken the unilateral decision to pump more oil, but it is still looking for consensus within Opec.

"Saudi Arabia knows that it owes its existence to its American allies. Venezuela, for example, can afford to be more hawkish," she says.

"Saudi Arabia would like to see a price of $25 a barrel or below. Iran, on the other hand, would not like to see it go below $28 a barrel."

One Opec member, Iraq, remains a destabilising influence - and the one factor that Western analysts fear could truly precipitate a global energy crisis.