OPEC Organization of Petroleum Exporting Countries BACKGROUND A - - PDF document

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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:
• Iran
• Iraq
• Kuwait
• Saudi Arabia
• Venezuela

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BACKGROUND, CONT...

• By 1973, eight other

nations joined

• Algeria
• Ecuador
• Gabon
• Indonesia
• Libya
• Nigeria
• Qatar
• United Arab

Emirates

• Ecuador left at 1992
• Gabon left in 1994

PARTICIPATING MEMBER NATIONS

• Algeria
• Angola
• Ecuador
• Libya
• Nigeria
• Qatar
• United Arab Emirates
• Republic of Iran
• Iraq
• Kuwait
• Saudi Arabia
• Venezuela

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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
• f the Arab-Israeli War when OPEC reduced

its production of crude oil

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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>.