Lesson Plan: The Father of OPEC and the Devil's Excrement

Overview

• Grade Level: AP World History (Modern), AP US History, AP Comparative Government, AP Macroeconomics, IB History, undergraduate introductory political economy.

• Time Required: Bell-ringer (10 minutes with audio); single-class structured lesson (50 minutes); extended option (two 50-minute sessions or one 90-minute block with primary-source work).

• Historical Period: 1959 to 1973 (founding and rise of OPEC), 1976 (Pérez Alfonzo's "devil's excrement" warning), within the longer arc 1928 to 2026 of producer-cartel formation and dissolution.

• Modern Connection: The United Arab Emirates' 28 April 2026 announcement that it would leave OPEC and OPEC+ effective 1 May 2026, ending fifty-nine years of membership.

Learning Objectives

By the end of this lesson, students will be able to:

1. Explain how the 1959 unilateral price cuts by the Seven Sisters triggered the producer-state response that became OPEC.

1. Identify the personal, political, and economic motives of Juan Pablo Pérez Alfonzo and Sheikh Abdullah Tariki, and the inspiration they drew from the Texas Railroad Commission.

1. Reconstruct the chain of events from the April 1959 Cairo Arab Petroleum Congress to the 14 September 1960 founding of OPEC in Baghdad.

1. Evaluate the resource-curse hypothesis using Venezuela as the central case, and assess Pérez Alfonzo's 1976 "devil's excrement" warning against subsequent Venezuelan history.

1. Compare the structural drivers of the 1960 founding of OPEC with those of the 2026 UAE departure, and assess where the parallel illuminates and where it misleads.

1. Construct an evidence-based argument about whether commodity cartels are fundamentally stable or prone to internal fracture.

Before Reading

Anticipation Questions

1. If a foreign-owned company set the price at which it bought your country's most valuable export, without consulting your government, what response would your government be entitled to make?

1. Why might a country that helped found a cartel sixty years ago decide to leave it today?

1. Is it possible for a country to be made worse off by discovering large reserves of a valuable commodity? Why might that be the case?

Key Vocabulary

• Cartel: an association of producers that coordinates output and pricing to influence market conditions, typically by limiting supply.

• Seven Sisters: the seven Western multinational oil companies (Standard Oil of New Jersey/Exxon, Royal Dutch Shell, BP/Anglo-Persian, Texaco, Gulf Oil, Mobil, and Standard of California) that dominated the international oil business from the 1920s to the 1970s.

• Posted price: the official buying price set by the oil majors for crude oil from a producing country, used as the basis for royalty calculations.

• Prorationing: a system of allocating production quotas to individual oil wells or fields to limit total output and support prices, pioneered by the Texas Railroad Commission in the 1930s.

• Resource curse / paradox of plenty: the empirical observation that countries with large natural-resource endowments often experience worse long-run development outcomes (slower growth, weaker institutions, more conflict) than resource-poor countries.

• OPEC quota: the maximum production volume each OPEC member is permitted under cartel agreements, used to defend a target oil price.

• Spare capacity: the volume of additional oil a producer can bring online quickly, treated as a strategic asset because it can be used to flood markets and discipline cheaters.

• OPEC+: the wider grouping that adds Russia and several non-OPEC producers to OPEC's coordination meetings, formed in 2016.

During Reading

Guided Questions

1. What did Pérez Alfonzo find in the Texas Railroad Commission's prorationing system that he believed could be replicated globally?

1. Why was Sheikh Abdullah Tariki the natural choice of partner for the Saudi side of the producer-cartel project?

1. What role did Exxon's 9 August 1960 price cut play in turning the Maadi Pact from a Gentlemen's Agreement into the institutional OPEC?

1. How long did the Seven Sisters dismiss OPEC after its 1960 founding, and what changed in October 1973?

1. What did Pérez Alfonzo mean by calling oil "the devil's excrement", and why does the story argue he was right about Venezuela?

After Reading

Discussion Questions

1. Comprehension: What was the Maadi Pact and why is it considered the seed of OPEC?

1. Analysis: Pérez Alfonzo built the cartel that the UAE just walked out of. The story claims that the cartel "was always going to fracture when one of its members decided that its individual interest had outgrown the collective." Is this claim historically defensible, or is it determinism dressed up as analysis?

1. Analysis: Was OPEC's success in 1973 the natural result of the structures Pérez Alfonzo and Tariki built in 1959-60, or was it primarily the consequence of the Yom Kippur War and the embargo that followed? How would you distinguish the two causes?

1. Evaluation: The UAE's stated reason for leaving OPEC is procedural: the quotas constrain its production. The deeper reasons are geopolitical (alignment with Washington, divergence from Saudi Arabia, the Iran war) and economic (peak-oil-demand pressure to extract reserves while there is still a buyer). Which of these reasons do you find most compelling, and why?

1. Debate (genuinely contestable): If you were the Saudi oil minister in May 2026, would you advise the king to defend OPEC discipline by cutting Saudi production unilaterally, or to flood the market and crash prices to discipline the UAE and force smaller producers back into line, as Yamani did in 1985?

The Parallel

1. What is structurally similar between the 1959-60 founding of OPEC and the 2026 UAE departure? Identify at least three elements (a constraining external system, a member whose interests diverge, a triggering price or quota action, a public announcement, an institutional fracture).

1. What is genuinely different? Consider the existence of OPEC+, the imminent decline in long-term oil demand, the role of the United States as a major producer in 2026 (it was a major importer in 1960), and the Iran war as a regional context.

1. The story ends by asking, "What comes next?" Construct two scenarios: one in which the UAE departure is a managed adjustment that leaves OPEC functional, and one in which it triggers a cascade that ends OPEC effectively. Identify the indicators a contemporary observer should watch in the next twelve months.

Activities

Bell-Ringer (10 minutes)

Play the audio narration of "The Father of OPEC and the Devil's Excrement" (approximately 10 minutes). Students take notes on a graphic organiser with three columns: "1959 to 1960," "2026," "Same / Different." After the audio, run a 90-second whip-around: "Was Pérez Alfonzo a hero, a villain, or a tragedy? Defend in one sentence."

Single Class (50 minutes)

• 0 to 5 minutes: Anticipation questions on the board, students respond on index cards.

• 5 to 25 minutes: Read or listen to the story together. Students mark the named historical actors and the institutional changes they cause.

• 25 to 40 minutes: Small-group work (groups of three or four). Each group is assigned one of the four After-Reading discussion questions and prepares a 60-second response with one piece of evidence from the story and one piece from outside it (a vocabulary term, a primary source, or a current headline).

• 40 to 48 minutes: Groups present. The teacher charts the arguments on the board.

• 48 to 50 minutes: Exit ticket. One sentence: "If you were Pérez Alfonzo in 1976, which lesson of your own career would you most want a future Venezuelan finance minister to learn?"

Extension Activity

Take-home (multi-day): Students choose one of the following commodity cartels or near-cartels and produce a one-page case file: the De Beers diamond cartel (1888 to 2000), the International Tin Council (1956 to 1985), the International Coffee Agreement (1962 to 1989), the Brazilian Coffee Defence Plan (1907 to 1924), the Texas Railroad Commission prorationing system (1930 to 1972), or OPEC itself (1960 to present). Each file should answer: (1) the founding trigger, (2) the dominant member or members, (3) the constituency the cartel served, (4) the constituency it cost, (5) the moment of fracture, (6) what came next. Class compiles the files into a shared "How Cartels End" comparison.

Alternative: Stage a 2026 OPEC ministerial roleplay. Half the class plays the Saudi delegation defending OPEC discipline; half plays the UAE delegation defending its right to determine production independently. Iraq, Iran, Venezuela, and Russia are assigned as smaller roles. Assess on whether students reconstruct the actual contemporary arguments (post-oil transition, sovereign wealth strategy, regional security alignment, market-share defence) rather than importing twentieth-century frames.

Primary Source Connections

1. OPEC Statute (1961). The founding constitution of the cartel, available at opec.org. Source type: international agreement / institutional document.

1. Pérez Alfonzo's "devil's excrement" interview (1976), translated excerpts. Most accessible via Foreign Policy magazine's 2009 retrospective ("The Devil's Excrement", foreignpolicy.com). Source type: oral interview / journalism.

1. "Pétroleo y Dependencia" (Pérez Alfonzo, 1971). Pérez Alfonzo's own treatise on oil and dependency, in Spanish; partial English translations available in academic anthologies. Source type: political-economy treatise.

1. The Yamani interview with Newsweek (1986) during the Saudi production surge, in which Yamani explained the volume strategy that crashed oil prices. Source type: oral interview, primary actor.

1. UAE Ministry of Foreign Affairs statement of 28 April 2026 announcing departure from OPEC and OPEC+ (wam.ae). Source type: government communication.

1. Eisenhower Foreign Relations of the United States (FRUS) 1958-60 Volume V, Document 351, on the US response to the 1959 oil price cuts and their consequences for producer states. Source type: declassified diplomatic record.

Standards Alignment

C3 Framework

• Dimension 1 (Developing Questions): This lesson supports the inquiry arc on whether cartels are stable equilibria or transitory bargaining outcomes. The compelling question is: "Do producer cartels die from outside pressure, internal defection, or both?"

• Dimension 2 (Applying Concepts): Economics (cartel theory, price-fixing, posted prices, quotas, market share, the resource curse), History (decolonisation of oil, the 1973 oil shock, late-20th-century petrostate formation), Civics (cartel governance, sovereign decision-making in international institutions), Geography (Persian Gulf, Caribbean, Texas oil basin).

• Dimension 3 (Evaluating Sources): The story's evidence manifest provides 23 primary and secondary citations, allowing students to practise verifying narrative claims against authoritative sources (Wikipedia, OPEC, S&P Global, Foreign Policy, the Stanford catalogue of the 1959 Cairo Congress).

• Dimension 4 (Communicating Conclusions): The Saudi-UAE debate roleplay and the "How Cartels End" case-file project both require students to construct argument-based products with evidence.

AP Alignment

• AP World History (Modern): Unit 8 (Cold War and Decolonization, c. 1900 to present) and Unit 9 (Globalization, c. 1900 to present). Specifically Topic 8.7 (Resistance to Established Power Structures) and Topic 9.3 (Economic Change).

• AP US History: Period 8 (1945 to 1980) on the 1973 oil crisis as a domestic shock, and Period 9 (1980 to present) on the post-1985 reshaping of US energy policy and the rise of US shale.

• AP Comparative Government and Politics: course themes on the rentier state, state-owned enterprises, and the political economy of resource-rich states.

• AP Macroeconomics: monopolistic and oligopolistic market structures, price-setting cartels, and the conditions under which cartels fracture.