OPEC Organization of Petroleum Exporting Countries BACKGROUND A - PDF document

9/23/2015 OPEC Organization of Petroleum Exporting Countries BACKGROUND ● A permanent, intergovernmental organization created at Baghdad conference in September of 1960 to obtain higher prices for crude oil ● Original members are: o Iran o Iraq o Kuwait o Saudi Arabia o Venezuela 1

9/23/2015 BACKGROUND, CONT... ● By 1973, eight other nations joined ● Ecuador left at 1992 o Algeria ● Gabon left in 1994 o Ecuador o Gabon o Indonesia o Libya o Nigeria o Qatar o United Arab Emirates PARTICIPATING MEMBER NATIONS ● Algeria ● United Arab Emirates ● Angola ● Republic of Iran ● Ecuador ● Iraq ● Libya ● Kuwait ● Nigeria ● Saudi Arabia ● Qatar ● Venezuela 2

9/23/2015 PURPOSE OF ORGANIZATION ● To control the production, exporting, and pricing of crude oil ● Largest Entity impacting the world’s oil supplies ● Has the power to change prices of petroleum and petroleum byproducts worldwide ECONOMIC IMPACT ● It can and does control the amount of oil produced in any given year, and so controls the price of crude oil ● Initially, in the 1960’s, the effort was unsuccessful ● Prices rose in 1971, then sharply in 1973-74 in the wake of the Arab-Israeli War when OPEC reduced its production of crude oil 3

9/23/2015 CURRENT ISSUES FACED ● Drive towards renewable energy ● Dwindling oil supply ● Discovery of oil outside of its members (eg: Colorado oil boom) ● Discover of new methods of oil extraction (eg: shale, thus eliminating their monopoly) WORKS CITED ● http://www.econlib.org/library/Enc/OPEC.html ● http://www.auto.howstuffworks.com/fuel-efficiency/fuel- consumption/gas-price3.html ● www.opec.org/opec_web/en/about_us/24.html ● Benjamin Zycher, "OPEC." The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. 24 September 2014. <http://www.econlib.org/library/Enc/OPEC.html>. 4