During the crucial oil negotiations in Teheran in 1971, the U.S. State Department committed a key tactical blunder. It chose to deal with the oil-producing countries (known as OPEC) as a group, rather than individually. This forced a hitherto squabbling collection of divided oil fiefdoms to harden into a powerful commodity cartel. This miscalculation was to have a devastating effect on the world economy two years hence. Just following the Yom Kippur war in 1973, OPEC's new-found bargaining power pushed the price of oil beyond $11 per barrel, a four-four increase which entailed a massive hemorrhage of money from Western oil-consuming countries.
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