Organization of the countries of producers and oil exporters (OPEC). Main objectives and OPEC tasks

Date: 2015-10-07; view: 449.

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OPEC (OPEC; pron.: /ˈoʊpɛk/ oh-pek) is the Organization of the Petroleum Exporting Countries. Its mission is to secure a return to oil investors and an economic supply of oil to consumers.

OPEC is intergovernmental and was created at the Baghdad Conference on 10–14 September 1960, by Iraq, Kuwait, Iran, Saudi Arabia and Venezuela. Then it was joined by nine more governments: Libya, United Arab Emirates, Qatar, Indonesia, Algeria, Nigeria, Ecuador, Angola, and Gabon. OPEC had a headquarters in Geneva, Switzerland and moved it to Vienna, Austria, on 1 September 1965.

OPEC formed when the international oil market was largely separate from that of centrally planned economies and was dominated by multinational companies. OPEC came up with a collective vision. OPEC's ‘Policy Statement' says there is a right of all countries to exercise sovereignty over their natural resources. Membership in OPEC grew to ten by 1969.

In the 1970s, OPEC acquired a say in pricing and raised oil prices steeply because of an embargo of Arab oil in 1973 and later because of revolution against the king of Iran in 1979. OPEC added to its goals the selling of oil for socio-economic growth of the poorer member nations. Membership grew to 13 by 1975.

In the 1980s, the price of oil was allowed to go up and then down after people were hurt enough to buy less oil. The OPEC nations, needing the oil sales, had severe economic hardship from the lower demand for oil. So they produced less oil and were able to increase oil prices to get more money from customers who were hurting also and already using less oil. Environmental issues had emerged on the international energy agenda. Lower demand for oil saw OPEC prices back at 1986 levels in 1998–99.

In the 2000s, a combination of factors pushed up prices in a well-supplied crude market. Prices continued up to then record-high levels in mid-2008 before going down for a while with the global financial problems and unemployment. OPEC's summits in Caracas and Riyadh in 2000 and 2007 had guiding themes of stable energy markets, sustainable oil production and the environment, and it adopted a long-term strategy in 2005.