Opec – Formation and Influence on the World Economy

1793 WordsDec 30, 20128 Pages
OPEC – Formation and influence on the world economy Ahlam Colorado Heights University Abstract The Organization of Petroleum Exporting Countries (OPEC) , is a permanent intergovernmental Organization, created at the Baghdad Conference on September 14 th, 1960, consisting of the world's major oil-exporting nations. It was founded to coordinate and unify the petroleum policies of its members, to serve as a platform for oil producers to achieve their economic objectives by limiting supplies in the hope of keeping prices and profits high. OPEC's influence on the market is undeniable. Because its member countries hold the vast majority of crude oil reserves (about 80%) and nearly half of natural gas reserves in the world, the organization…show more content…
“Member Country Delegations (Representatives of OPEC Member Countries) meet at the OPEC Conference to co-ordinate and unify their petroleum policies in order to promote stability and harmony in the oil market.” (OPEC, March 2009) The supreme authority of the organization, OPEC Conference consists of representatives of OPEC Member Countries. It’s supported by the OPEC Secretariat, directed by the Board of Governors and run by the Secretary General, and by various bodies including the Economic Commission and the Ministerial Monitoring Committee. (OPEC, March 2009) According to OPEC website “ The Member Countries consider the current situation and forecasts of market fundamentals, such as economic growth rates and petroleum demand and supply scenarios. They then consider what, if any, changes they might make in their petroleum policies. For example, in previous Conferences the Member Countries have decided variously to raise or lower their collective oil production in order to maintain stable prices and steady supplies to consumers in the short, medium and longer term.” (OPEC, March 2009) Does OPEC control the oil market? According to OPEC, “No, OPEC does not control the oil market. OPEC Member Countries produce about 40 per cent of the world’s crude oil and 15 per

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