ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES- (OPEC)

HQ-VIENNA, 13 MEMBERS

About OPEC-

Is an …intergovernmental organization of 13 nations .

Foundation-

founded in 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait,Saudi Arabia, Venezuela),

Head quarters-

At Vienna.

Importance of OPEC-

-The 13 countries accounted for an estimated…. 44 percent of global oil production and ..81  percent of the world's "proven" oil reserves,

-OPEC a major influence on global oil pricesthat were previously determined by American-dominated multinational oil companies.

-Supreme Authority-

The OPEC Conference is the supreme authority of the organisation, and consists of delegations normally headed by the oil ministers of member countries.

The chief executive of the organisation is the OPEC secretary general.

Mission-

OPEC's stated mission is "to coordinate and unify the petroleum policies of its member countries and ….ensure the stabilization of oil markets, in order to secure an …..efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry." 

The organization is also a…… significant provider of information about the international oil market.

12  OPEC's members –

Member Countries

• Algeria
• Ecuador
• Equatorial Guinea
• Gabon
• Iran
• Iraq
• Kuwait
• Libya
• Nigeria
• Saudi Arabia
• United Arab Emirates
• Venezuela

- Qatar left OPEC on 1 January 2019, after joining the organization in 1961, to focus on natural gas production, of which it is the world's largest exporter in the form of liquified natural gas (LNG).

-Ecuador announced that it would leave OPEC on 1 January 2020.

-In October 2019, Saudi Arabia invited Brazil to join OPEC.

-  Angola withdrew its membership effective 1 January 2024

Economists often cite OPEC as a textbook example of a cartel that ..cooperates to reduce market competition, but whose consultations are protected by the doctrine of sovereign immunity under international law.

OPEC+ members

In addition to the OPEC members, the following 10 more oil exporting countries led by Russia, are grouped as OPEC+ cartel from the year 2016 as they cooperate in fixing the global crude oil prices by agreeing to production quotas so that global production is below the global demand/consumption.

Is OPEC Losing Its Impact on Prices?

A combination of factors may have contributed (albeit not equally) to dampening the effect of the announcement.

First, oil inventories have accumulated over the past few years, and these accumulated inventories are preventing oil prices from rising quickly. Inventories dampen the effects of sudden changes in oil supply or demand.

Second, while OPEC members represent a large portion of oil production, a number of other countries—including the U.S.—account for 58 percent of the oil production and are not part of the OPEC agreement to reduce production.

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