OPEC
Organization of the Petroleum Exporting Countries | |
|---|---|
 Flag | |
 Map showing the 12 member countries (as of 2026) | |
| Headquarters | Vienna, Austria |
| Official language | English |
| Type | International cartel[1] |
| Membership | |
| Leaders | |
| Haitham al-Ghais | |
| Establishment | Baghdad, Iraq |
• Statute | September 14, 1960 |
• In effect | January 1961 |
| Currency | Indexed as USD per barrel (US$/bbl) |
Website OPEC.org | |
OPEC, the Organization of the Petroleum Exporting Countries is an international organization. Since 1965, the headquarters of OPEC has been in Vienna, Austria. OPEC was established in Baghdad, Iraq on 10–14 September 1960.[4]
Its work is to "coordinate and unify the petroleum policies" of its members, and also to "ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry".[5][6][7][8]
According to the United States Department of Energy Energy Information Administration (EIA), OPEC crude oil production is an important factor affecting global oil prices. OPEC sets production targets for its member nations and generally, when OPEC production targets are reduced, oil prices increase.[9] Projections of changes in Saudi production result in changes in the price of crude oil.[9]
OPEC was formed in 1960 when the international oil market was largely dominated by multinational companies known as the 'seven sisters'.[10]: 503 The formation of OPEC was a turning point in state control over natural resources.[10]: 505 In the 1960s OPEC made sure that oil companies could not unilaterally cut prices.[10]: 505 In December 2014, OPEC and the oil men were named in the top 10 most influential people in the shipping industry by Lloyds.[11]
History
[change | change source]OPEC was established at a conference in Baghdad, Iraq in September 1960.[12] Prior to the OPEC, the oil market in the world was dominated by a cluster of aggressive Western oil corporations referred to as the Seven Sisters.[13] These companies included ExxonMobil, Chevron, Texaco, Gulf Oil, Shell, and BP.[14] The oil-producing nations desired greater control of their own natural resources and the income they received out of the same.[15]
The five founding members included:
The group relocated to Vienna, Austria in 1965 where it is located.
Mission and Goals
[change | change source]The principal function of OPEC is to coordinate and unify the oil policies of the members. Its three main goals are:
- Stable Prices: To maintain fair prices of oil in order to prevent its rising and falling too fast.
- Constant Revenue: To ensure that the oil producing countries receive a constant supply of funds to develop their economies. Constant Supply: This is in order to ensure that the countries who require oil are always able to purchase it.
How it Works
[change | change source]OPEC leaders have a minimum of two meetings every year to discuss the global economy. When the oil in the world is too much and the price is falling they might consent to reduce production (produce less oil) to allow the price to recover. In case the price is too expensive, they can produce more in the aim of reducing the price to the consumer.[16][17][18]
Members
[change | change source]12 countries are members of OPEC.[19] The names of these countries are:
| Region | Countries |
| Middle East | Iran, Iraq, Kuwait, Saudi Arabia, United Arab Emirates |
| Africa | Algeria, Congo, Equatorial Guinea, Gabon, Libya, Nigeria |
| South America | Venezuela |
Note: Some countries like Qatar and Angola have left the group in recent years to focus on their own energy goals. And on 28 April 2026, United Arab Emirates has accounced to leave OPEC from 1 May 2026[20]
What is OPEC+?
[change | change source]OPEC began collaborating with other non-member states in 2016, such as Russia, Mexico and Kazakhstan.[21] This larger alliance is known as OPEC+. This larger alliance is known as OPEC+. They jointly own approximately half of the oil resources in the world, which further gives them more power in control of the global energy prices.[22] Together, OPEC+ countries produce about half of the world's oil supply, which gives them significant influence over global energy prices.[23]
Why is it Important?
[change | change source]The significance of OPEC is that there are numerous applications of oil, which can be useful in the form of gasoline in automobiles, heating in residential houses, and plastic products. Since the members of OPEC control approximately 80 percent of the proven oil reserves on earth, their actions can determine the amount of money people worldwide will pay at the gas pumps.
Aims
[change | change source]Member countries of the OPEC came together to form this international organization with several aims. Some of the aims are:
- To protect the interest of the member countries.
- To make sure that the price of petroleum products do not change much.
- To make certain a regular supply of petroleum oil to other countries.
- To make sure that member countries get the right amount of money from sale of oil products.
- To decide policies to follow relating to production and sale of petroleum oil.
However, OPEC has not always been able to achieve all these aims.
Related pages
[change | change source]References
[change | change source]- ↑ "Glossary of Industrial Organisation Economics and Competition Law" (PDF). OECD. 1993. p. 19.
- ↑ "Member Countries". OPEC. Retrieved 29 January 2017.
- ↑ "OPEC 172nd Meeting concludes". OPEC (Press release). 25 May 2017.
- ↑ Griffin, James M.; Fantini, Mario (2014), "2014 World Oil Outlook (WOO)" (PDF), OPEC, Vienna, p. 396, ISBN 978-3-9502722-8-4
- ↑ "About", OPEC, Vienna, nd, retrieved 12 December 2014
- ↑ "Statute" (PDF), OPEC, 2012, retrieved 12 December 2014
- ↑ "Opec and Oil Prices: Leaky Barrels". The Economist. Retrieved 12 May 2014.
- ↑ "Our Mission". OPEC. Retrieved 16 February 2013.
- 1 2 "Energy & Financial Markets: what drives crude oil prices?", EIA, 2014, retrieved 12 December 2014
- 1 2 3 Yergin, Daniel 1991. The Prize: the epic quest for oil, money, and power. New York: Simon & Schuster.
- ↑ "3. Opec and the oil men". Lloyd's List. 12 December 2014.
- ↑ "Brief History". Organization of the Petroleum Exporting Countries. Retrieved 2026-03-20.
- ↑ "OPEC: Membership, Organization, History, & Facts". Encyclopedia Britannica. Retrieved March 20, 2026.
- ↑ "The international backdrop: The Seven Sisters and Opec". Equinor. Retrieved March 20, 2026.
- ↑ "OPEC 60 years and beyond" (PDF). OPEC Bulletin. September 2020. Retrieved March 20, 2026.
- ↑ "40th OPEC and non-OPEC Ministerial Meeting". OPEC Secretariat. November 30, 2025. Retrieved March 20, 2026.
- ↑ "What drives crude oil prices: Supply OPEC". U.S. Energy Information Administration. Retrieved March 20, 2026.
- ↑ "OPEC+ countries adjust production and reaffirm commitment to market stability". OPEC. March 1, 2026. Retrieved March 20, 2026.
- ↑ "OPEC : Member Countries". www.opec.org.
- ↑ United Arab Emirates Says It Will Leave OPEC in Bolw to Oil Cartel
- ↑ "What is OPEC+ and how is it different from OPEC?". U.S. Energy Information Administration. May 9, 2023. Retrieved March 20, 2026.
- ↑ "Declaration of Cooperation". Organization of the Petroleum Exporting Countries. Retrieved March 20, 2026.
- ↑ "The influence of OPEC+ on oil prices" (PDF). European Central Bank. 2020. Retrieved March 20, 2026.
Other websites
[change | change source]- OPEC official site Archived 2006-08-07 at the Wayback Machine
