Organization Of The Petroleum Exporting Countries
The term Organization of the Petroleum Exporting Countries (OPEC) refers to a group of 13 of the world’s major oil-exporting nations. OPEC was founded in 1960 to coordinate the petroleum policies of its members and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.Countries that belong to OPEC include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela (the five founders), plus Algeria, Angola, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, and the United Arab Emirates.
Definition: The Organization of the Petroleum Exporting Countries (OPEC) is an international organization consisting of 13 major oil-exporting countries, established in 1960. Its main goal is to coordinate and unify the petroleum policies of its member countries, ensure the stability of the oil market, and provide technical and economic assistance to its members.
Origin: OPEC was founded in September 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela during the Baghdad Conference. The organization was established to counter the control of oil prices by Western oil companies and to protect the economic interests of its member countries.
Categories and Characteristics: OPEC member countries are located in the Middle East, Africa, and South America. Key characteristics include:
- Coordinated oil production: Setting production quotas to control oil supply and influence global oil prices.
- Market stability: Regulating oil production to avoid excessive market fluctuations and ensure market stability.
- Technical and economic assistance: Providing technical support and economic aid to member countries to promote the development of the oil industry.
Specific Cases:
- 1973 Oil Crisis: OPEC members reduced oil production, causing global oil prices to skyrocket, severely impacting Western economies.
- 2016 Production Cut Agreement: To address falling oil prices, OPEC and non-OPEC oil-producing countries reached a production cut agreement, successfully stabilizing oil prices.
Common Questions:
- How does OPEC influence oil prices? OPEC controls oil supply by setting production quotas, thereby influencing global oil prices.
- Are OPEC's decisions always effective? Not always, as market factors and production from non-OPEC countries also affect oil prices.
