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Definition and Introduction to OPEC
OPEC, The Organisation of the Petroleum Exporting Countries, is a name that has become synonymous with the worldwide petroleum market. But what does it do, who is involved and how important is OPEC to our day-to-day lives? This article aims to answer these basic questions in a clear and concise fashion.
OPEC is a permanent organisation of 12 countries which are world-leaders in oil production. The primary aim of OPEC is to unify petroleum policies between its member countries, to ensure fair and stable oil prices. OPEC also tries to ensure a steady supply of petroleum to oil consuming nations.
The headquarters of OPEC are found in Vienna, Austria.

Brief History of OPEC

OPEC was created in 1960
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There have been several key points in the organisation’s history where they have taken the decision to alter oil production. For example, during the Gulf War in the early 1990’s OPEC produced more oil, to try and stabilise world supplies. OPEC tightened supplies during 1979-1980, which led to an increase in oil prices. OPEC once again tightened supplies in 1999, which eventually led to record oil prices in 2008.
OPEC decides what their overall oil output will be at bi-annual conferences. Delegates and oil ministers from member countries meet to work out production upper limits for each member. Occasionally these conferences will be called more than twice yearly if there is a major change in the global oil market.
Though the influence of OPEC on crude petroleum prices is substantial, the influence of OPEC on end products, such as petrol, is less important. Oil product prices can be affected by numerous factors, notably government policies and taxes.

OPEC Oil Reserves and Production

OPEC countries collectively produce over 40% of the world’s crude petroleum and a significant amount of natural gas. As of 2010, it is estimated that over 80% of proven oil reserves in the world are found in OPEC member countries, or in barrels, 1190 billion barrels of crude oil.
It must be noted that many of the member states are heavily

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