OPEC

Introduction: Saudi Arabia is the major and dominant producer of oil and gas industry as reported by the Royal Embassy of Saudi Arabia (2015). This position has been held over a good number of years, though recently, there has been a sharp fall in the world’s oil prices. This has negatively impacted the revenues collected from the exports of oil and gas, forcing the government to act quickly (Devarajan, 2015, Taylor & Francis Group, 2003). This action came late, and in a bid to stop the US and Canada

various ties between the Organization of Petroleum Exporting Countries and the United States of America has always ebbed and flowed. American-OPEC relations have been strained by events such as the increase in oil prices in 1973 in retaliation of the American support of Zionist terrorists that the U.S. would call “Israel”, but now, the various economies of OPEC nations themselves could be under threat. The United States of America has invested more energy and resources into more expensive and more controversial

organization actually favored inflation more than in one occasion but its influence in controlling oil prices dropped considerably since 1973. It was proven that, having quadrupled the price of oil, OPEC had in its hands the power to inflict economic hurt on the rich countries. (Beenstock 2007, p. 134) Although OPEC does not completely control the oil market today, it nevertheless continues to be influent because its decisions to reduce production may lead to either a decrease or increase of oil prices.

about one-half of Saudi Arabia 's reserves. They include Iraq, Iran, Kuwait and the United Arab Emirates.” These countries, and more, for a total of 12, form what is known as OPEC, the Organization of the Petroleum Exporting Countries. The OPEC cartel claims to control around 78% of the world’s oil reserves. Since OPEC controls the majority of the world’s oil supply they can tweak the price of oil depending on their fiscal goals. If they want to make more money they can withhold oil from the

News). Brent Crude oil is priced below $50 a barrel and US crude is dipped down to below $48 a barrel now (BBC News). Oil prices shock is making the whole oil industry straggling. In particular, oil producing and exporting nations including Russia, OPEC (especially Venezuela and Saudi Arabia), and United States are the major victims in the oil prices shock. They are suffering from a fallback in their economy development due to the significant revenue shortfalls. Russia is suffering from a significant

their economic objectives was OPEC. The organization was modeled after the Texas Railroad Commission and formed at the Baghdad Conference in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela . The founding five counties were later joined by Qatar, Indonesia, Libya, the United Arab Emirates, Algeria, and Nigeria . At the time of its creation most industrial countries were immensely dependent on the oil imported from the region of the world represented by the OPEC members. Nonetheless, the member

ECONOMICS ASSIGNMENT Lachlan Milligan   Ever since 2014 crude oil prices have been decreasing dramatically, this has contributed to various global economic issues that has the potential to destabilise the economy.There are various factors which contribute towards these issues where the result has a negative effect on Australian industries. In order to prevent the ever decreasing crude oil prices, the Australian government needs to implement new policies and legislation which could assist to mitigate

liabilities, in a time where the people of the Middle East were calling for nationalisation and equity participation by the governments of the oil producing countires. This lead to the creation of the Organisation of the Petroleum Exporting Countries (OPEC) in Baghdad, 1960. Their initial aim was to ensure the security of their tax revenues from the International Oil Companies. This can be seen as the creation of a cartel in order to counter the oligoponistic power of buyers. In the previous time periods

of its crude oil. This niche was filled from the creation of OPEC who uses price gouges to create an economic boom in their country, through unifying and controlling the industry. This economic boom produced by OPEC amounts to an annual 730 billion (U.S.) dollars. In order to fully understand the magnitude of power this organization has, we can compare their annual income to every country 's GDP. After doing this we notice that OPEC would be the 20th wealthiest nation trumping 167 countries in

over the country 's significant economic activities. Saudi Arabia owns about 16% of the global oil reserves and is the number one exporter of oil (Saudi Arabia, 2013). In addition, the Kingdom of Saudi Arabia was instrumental in the formation of the OPEC (Organization of the Petroleum Exporting Countries) group, which initially comprised Iraq, Venezuela, Iran, Kuwait and Venezuela (Energy indicators, 2004). Currently, the petroleum industry constitutes about 80% of the country 's budgetary incomes;