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A 1020 Vienna, Obere Donaustrasse 93
Phone: +43-(0)1- 211 12 - 0 |
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The Organization of the Petroleum Exporting Countries (OPEC) is
an international cartel made up of Algeria, Angola, Ecuador,
Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,
the United Arab Emirates, and Venezuela. The Vienna-based
organization has maintained its headquarters there since 1965,
hosting regular meetings between the oil ministers of its member
states. |
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The principal aim of the organization, according to
its Statute, is the determination of the best means for safeguarding
their interests, individually and collectively; devising ways and means
of ensuring the stabilization of prices in international oil markets
with a view to eliminating harmful and unnecessary fluctuations; giving
due regard at all times to the interests of the producing nations and to
the necessity of securing a steady income to the producing countries; an
efficient, economic and regular supply of petroleum to consuming nations,
and a fair return on their capital to those investing in the petroleum
industry."
OPEC's influence on the market has been called into question. Several
members of OPEC alarmed the world and triggered high inflation across
both the developing and developed world when they used oil embargoes in
the 1973 oil crisis. OPEC's ability to control the price of oil has
diminished somewhat since then, due to the subsequent discovery and
development of large oil reserves in the Gulf of Mexico and the North
Sea, the opening up of Russia, and market modernization. OPEC nations
still account for two-thirds of the world's oil reserves, and, in 2005,
41.7% of the world's oil production, affording them considerable control
over the global market. The next largest group of producers, members of
the OECD and the Post-Soviet states produced only 23.8% and 14.8%,
respectively, of the world's total oil production. As early as 2003,
concerns that OPEC members had little excess pumping capacity sparked
speculation that their influence on crude oil prices would begin to
slip. |
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| History |
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| Venezuela was the first country to move towards the
establishment of OPEC by approaching Iran, Iraq, Kuwait and Saudi Arabia
in 1949, suggesting that they exchange views and explore avenues for
regular and closer communications between them. In September 1960, the
governments of Iraq, Iran, Kuwait, Saudi Arabia and Venezuela met in
Baghdad to discuss the reduction in price of crude oil produced by their
respective countries. As a result, OPEC was founded to unify and
coordinate members' petroleum policies. Original OPEC members include
Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Between 1960 and 1975,
the organization expanded to include Qatar (1961), Indonesia (1962),
Libya (1962), the United Arab Emirates (1967), Algeria (1969), and
Nigeria (1971). Ecuador and Gabon were members of OPEC, but Ecuador
withdrew on December 31st, 1992[10] because they were unwilling or
unable to pay a $2 million membership fee and felt that they needed to
produce more oil than they were allowed to under the OPEC quota. Similar
concerns prompted Gabon to follow suit in January 1995. Angola joined on
the first day of 2007. Indonesia is reconsidering its membership having
become a net importer and being unable to meet its production quota. The
United States was a member during its formal occupation of Iraq via the
Coalition Provisional Authority. Indicating that OPEC is not averse to
further expansion, Mohammed Barkindo, OPEC's Secretary General, recently
asked Sudan to join. Iraq remains a member of OPEC, though Iraqi
production has not been a part of any OPEC quota agreements since March
1998. |
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| Economics |
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Since currently worldwide oil sales are denominated
in U.S. dollars, changes in the value of the dollar against other world
currencies affect OPEC's decisions on how much oil to produce. For
example, when the dollar falls relative to the other currencies,
OPEC-member states receive smaller revenues in other currencies for
their oil, causing substantial cuts in their purchasing power. After the
introduction of the euro, pre-invasion Iraq decided it wanted to be paid
for its oil in euros instead of US dollars causing OPEC to consider
changing its oil exchange currency to euros. Member states Iran and
Venezuela have undergone similar shifts from the dollar to the euro.
OPEC decisions have had considerable influence on international oil
prices. For example, in the 1973 energy crisis OPEC refused to ship oil
to western countries that had supported Israel in the Yom Kippur War or
October War, which they fought against Egypt and Syria. This refusal
caused a fourfold increase in the price of oil, which lasted five months,
starting on October 17, 1973, and ending on March 18, 1974. OPEC nations
then agreed, on January 7, 1975, to raise crude oil prices by 10%. At
that time, OPEC nations — including many who had recently nationalized
their oil industries — joined the call for a new international economic
order to be initiated by coalitions of primary producers. Concluding the
First OPEC Summit in Algiers they called for stable and just commodity
prices, an international food and agriculture program, technology
transfer from North to South, and the democratization of the economic
system. |
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Text source in extracts: |
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| WIKIPEDIA - the free
encyclopedia |
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| further Information about |
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Internet Portal
Betriebsges.m.b.H.
Praterstrasse 33/20
A-1020 Vienna
Tel: +43/01/9580808
Fax: +43/01/9580909
E-Mail: office@citype.com
www.citype.com
FN 200659 m
ATU 50515900 |
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