OPEC translated from English is the organization of oil exporting countries. The purpose of creating OPEC was and is to control oil production quotas and prices.
OPEC was created in September 1960 in Baghdad. The list of members changes periodically during the existence of the organization and as of 2018 (July) it includes 14 countries.
The initiators of the creation were 5 countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), United United Arab Emirates(1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975), Angola (2007) and Equatorial Guinea (2017).
As of today (February 2018), OPEC includes 14 countries:
- Algeria
- Angola
- Venezuela
- Gabon
- Kuwait
- Qatar
- Libya
- United Arab Emirates
- Nigeria
- Saudi Arabia
- Equatorial Guinea
- Ecuador
Russia is not a member of OPEC.
Countries included in the organization control 40% of all oil production on earth, that’s 2/3. The leader in oil production in the world is Russia, but it is not part of OPEC and cannot control the price of oil. Russia is an energy-dependent country. The level depends on its sale economic development and the well-being of Russians. Therefore, in order not to depend on oil prices on the world market, Russia should develop other sectors of the economy.
So, several times a year the ministers of OPEC countries gather for meetings. They assess the state of the world oil market and predict the price. Depending on this, decisions are made to reduce or increase oil production.
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OPEC - what is it? Decoding, definition, translation
OPEC is an international cartel of countries that produce and export oil., created with the goal of coordinating the volume of its production and thus influencing its price. The abbreviation OPEC is a Russian transcription of the English abbreviation OPEC, the decoding of which is as follows: Organization of Petroleum Exporting Countries, which translated into Russian means “organization of oil exporting countries.”
Organization of Petroleum Exporting Countries
OPEC includes 12 countries that are lucky with oil reserves. Here list of OPEC member countries: UAE, Iran, Iraq, Kuwait, Saudi Arabia, Angola, Qatar, Libya, Algeria, Nigeria, Ecuador and Venezuela. Russia is not a member of OPEC historical reasons: The organization was founded in 1960, when the USSR was not yet a key player in the oil market. Today in Russia difficult relationships with OPEC, although our country is an “observer” in this organization.
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OPEC- an international intergovernmental organization created by oil-producing countries in order to stabilize oil prices. IN OPEC composition includes 12 countries: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador and Angola. The headquarters is located in Vienna.
OPEC as always operating organization was created at a conference in Baghdad on September 10-14, 1960.
In 2008, Russia announced its readiness to become a permanent observer in the cartel.
The goals of OPEC are:
· Coordination and unification of the oil policies of the member states.
· Determination of the most effective individual and collective means of protecting their interests.
· Ensuring price stability on world oil markets.
· Attention to the interests of oil-producing countries and the need to ensure: sustainable income for oil-producing countries; efficient, cost-effective and regular supply of consumer countries; fair returns from investments in the oil industry; security environment in the interests of present and future generations.
· Cooperation with non-OPEC countries to implement initiatives to stabilize the global oil market.
The energy and oil ministers of OPEC member states meet twice a year to assess the international oil market and forecast its development for the future. At these meetings, decisions are made on the actions that need to be taken to stabilize the market. Decisions on changes in oil production volumes in accordance with changes in market demand are made at OPEC conferences.
The structure of OPEC consists of a Conference, committees, a board of governors, a secretariat, a secretary general and an OPEC economic commission.
Supreme body of OPEC - Conference ministers of states included in the organization also applies Board of Directors, in which each country is represented by one delegate. As a rule, it attracts the closest attention not only from the press, but also from key players in the global oil market.
The conference determines the main directions of OPEC's policies, ways and means of their practical implementation and makes decisions on reports and recommendations submitted by the Board of Governors, as well as on the budget. It instructs the Council to prepare reports and recommendations on any issues of interest to the organization. The Conference is formed by the Board of Governors itself (one representative per country, as a rule, these are the ministers of oil, extractive industries or energy). She also elects the president and appoints the general secretary of the organization.
Secretary General is the highest official Organization, OPEC Plenipotentiary Representative and Head of the Secretariat. He organizes and directs the work of the Organization. The structure of the OPEC secretariat includes three departments. Secretary General (since 2007) - Abdullah Salem al-Badri.
OPEC Economic Commission is concerned with promoting stability in international oil markets at fair price levels so that oil can maintain its importance as a primary global energy source in accordance with the objectives of OPEC, closely monitors changes in energy markets and keeps the Conference informed of these changes.
Interministerial Committee on monitoring was founded in March 1982 at the 63rd (extraordinary) meeting of the conference. The Committee monitors (annually statistics) the situation and proposes actions to the conference to solve relevant problems.
OPEC Secretariat functions as headquarters. He is responsible for carrying out the executive functions of the organization in accordance with the provisions of the OPEC Charter and the orders of the Board of Governors.
Fund international development OPEC
In 1976, OPEC established the OPEC Fund for International Development (headquartered in Vienna, originally called the OPEC Special Fund). It is a multilateral development financial institution that promotes cooperation between OPEC member states and other developing countries. The Fund's assistance can be used by international financial institutions providing assistance to developing countries and all non-OPEC members developing countries. The OPEC Fund provides loans on concessional terms mainly of three types: for projects, programs and balance of payments support. The Fund's financial resources are generated from voluntary contributions from member states and profits generated through the Fund's lending and investment operations.
Its price value is the arithmetic average of spot prices for types of oil produced by the organization's participants.
Last September, OPEC celebrated its anniversary. It was created in 1960. Today, OPEC countries occupy a leading position in the field of economic development.
OPEC translated from English “OPEC” - “Organization of Petroleum Exporting Countries”. This is an international organization created to control the volume of sales of crude oil and set its price.
By the time OPEC was created, there was a significant surplus of black gold in the oil market. The appearance of excess oil is explained by the rapid development of its vast deposits. The main supplier of oil was the Middle East. In the mid-50s of the twentieth century, the USSR entered the oil market. The volume of black gold production in our country has doubled.
The result of this was the emergence of serious competition in the market. Against this background, oil prices fell significantly. This contributed to the creation of OPEC. 55 years ago, this organization pursued the goal of maintaining an adequate level of oil prices.
Which states are included?
Today this organization includes 12 powers. These include states in the Middle East, Africa and Asia.
Russia is not a member of OPEC in 2019. Characterizing the powers that are part of this organization is not an easy matter. Only one thing can be said with confidence: just like 55 years ago, today the countries on the list are united by oil policy.
The initiator of the creation of this organization was. Initially, the list included it, as well as the leading oil exporting states. After this, the list was expanded. Libya was included in the list not during the time of Colonel Gaddafi, as many people think, but under King Idris, in 1962. entered the list only in 1967.
In the period 1969-1973. the list was supplemented by such members as , and . In 1975, Gabon joined the list. In 2007, she entered the list. Will the OPEC list be replenished in soon, is not known for certain.
What are countries?
The states that are part of this organization in 2019 produce only 44% of the world's oil production. But these countries have a huge influence on the black gold market. This is explained by the fact that the states that are part of this organization own 77% of all proven oil reserves in the world.
Saudi Arabia's economy is based on oil exports. Today, this black gold exporting state has 25% of oil reserves. Thanks to the export of black gold, the country receives 90% of its income. The GDP of this largest exporting state is 45 percent.
Second place in gold mining was given to . Today this state, a major oil exporter, occupies 5.5% of the world market. It should be considered an equally large exporter. The extraction of black gold brings the country 90% of its profits.
Until 2011, Libya occupied an enviable place in oil production. Today the situation is this, there is no time richest state, can be called not just complex, but critical.
The third largest oil reserves is. The southern deposits of this country can produce up to 1.8 million black gold in just one day.
It can be concluded that most of states that are members of OPEC are dependent on the profits that their oil industry. The only exception among these 12 states is Indonesia. This country also receives income from such industries as:
For other powers that are part of OPEC, the percentage of dependence on the sale of black gold can range from 48 to 97 indicators.
When difficult times come, states with rich oil reserves have only one option - to diversify the economy as quickly as possible. This happens due to the development of new technologies that help save resources.
Organization policy
In addition to the goal of unifying and coordinating oil policy, the organization has an equally priority task - to stimulate economical and regular supplies of goods by members to those states that are consumers. One more the most important goal is to obtain a fair return on capital. This is relevant for those who actively invest in industry.
The main governing bodies of OPEC include:
- Conference.
- Advice.
- Secretariat.
The conference is supreme body this organization. The highest position should be considered the position of Secretary General.
Meetings between energy ministers and black gold specialists take place twice a year. The main goal The meeting is to assess the state of the international oil market. One more priority is to develop a clear plan to stabilize the situation. The third purpose of the meeting is to forecast the situation.
The organization’s forecast can be judged by the situation on the black gold market last year. Representatives of the member countries of this organization argued that prices would be maintained at $40-50 per barrel. At the same time, representatives of these states did not rule out that prices could rise to $60. This could only happen if China’s economy grew intensively.
Judging by latest information, in the plans of the leadership of this organization there is no desire to reduce the amount of oil products produced. Also, OPEC has no plans to interfere in the activities of international markets. According to the organization's management, it is necessary to give the international market a chance to regulate itself.
Today, oil prices are close to a critical point. But the market situation is such that prices can either rapidly fall or rise.
Attempts to resolve the situation
After the start of another economic crisis that gripped the whole world, the OPEC countries decided to meet again. Previously, 12 states were meeting when there was a record drop in futures for black gold. Then the size of the drop was catastrophic - up to 25 percent.
Judging by the forecast given by the organization's experts, the crisis will not affect only Qatar. In 2018, the price of Brent oil was about $60 per barrel.
Price policy
Today the situation for the OPEC participants themselves is as follows:
- Iran - the price that ensures a deficit-free state budget is $87 (the share in the organization is 8.4%).
- Iraq - $81 (share in the organization - 13%).
- Kuwait - $67 (share in the organization - 8.7%).
- Saudi Arabia - $106 (share in the organization - 32%).
- UAE - $73 (share in the organization - 9.2%).
- Venezuela - $125 (share in the organization - 7.8%).
According to some reports, at an informal meeting, Venezuela made a proposal to reduce current oil production volumes to 5 percent. This information has not yet been confirmed.
The situation within the organization itself can be called critical. A year of significantly lower prices for black gold has hit the OPEC countries hard in the pocket. According to some estimates, the total income of member states could drop to 550 billion US dollars per year. The previous five-year plan showed much higher indicators. Then the annual income of these countries is 1 trillion. US dollars.
Every person is well aware of the existence of oil and products made from it. At the same time, even a schoolchild is aware that the extraction of black gold is carried out from the bowels of the earth. On the entire planet, as reality shows, there are not so many states on whose territory oil is produced. Most of them are called OPEC countries. We will look at them in this article.
basic information
So, before we expand on the topic, let’s first find out what OPEC actually is. This abbreviation translated from in English means "organization of petroleum exporting countries". In fact, this is a worldwide cartel, the main purpose of which was to regulate oil production, as well as control its price.
Key points
Countries that are members of OPEC are this moment Currently, they control about two-thirds of the world's oil reserves. The states of this organization account for about 40% of all world production of black gold. It is worth noting that Canada and OPEC, the list of countries of which will be given below, did not pass the peak of oil in the modern era. In turn, the Russian Federation passed its oil peak back in 1988, which is far from us. The composition of OPEC then was initially somewhat different from the current one. The organization itself was formed during the Baghdad Conference, which took place from September 10 to 14, 1960. The initial members of the newly created structure were states such as Kuwait, Iraq, Iran, Saudi Arabia and Venezuela. By the way, it was the latter who initiated the creation of the cartel.
Interesting fact. Great Britain, Oman, Norway, Mexico, Brunei and even one that does not exist today Soviet Union have never been part of OPEC.
Historical reference
By the time the first OPEC was formed, the world market had a significant surplus of oil offered for sale. This surplus was formed largely due to the fact that the active development of simply colossal oil sources in the Middle East began. The Soviet Union also actively entered the world stage, doubling the volume of black gold extracted from the bowels of the earth during the period from 1955 to 1960. This state of affairs led to a significant increase in competition on the world market, which quite logically ensured a constant reduction in prices.
Note that at that time the world oil market was completely controlled by seven transnational corporations that worked in the financial interests of exclusively Western powers. To clearly coordinate the affairs of these companies, the International Oil Cartel was created, which kept oil prices within the range of 1.5-3 US dollars per barrel.
Thus, the creation of OPEC was primarily based on ensuring that leading oil exporters could coordinate their actions as effectively as possible to prevent a decrease in world prices for oil products. Well, since in the era of the 1960s the world market was glutted with oil, OPEC’s first priority was to agree on restrictions on oil production in order to stabilize prices.
Prerequisites
Before finding out which countries are part of OPEC, we point out the fact that the first signs of the creation of this organization appeared back in the 1930s, when oil fields began to be developed in the Middle East. Almost the very first place on the list of oil-bearing sources was Baghdad. In 1934, industrial production started in Bahrain, in 1936 in Kuwait, in 1938 in Saudi Arabia, and after World War II in other countries.
Due to the fact that these powers did not have their own financial and human resources for oil production, foreigners were brought in to develop the subsoil. Five American companies were ahead of everyone in this matter: ExxonMobil, Texaco, Mobil Oil, Standard Oil Company of California, and Gulf Oil. The British, represented by British Petroleum, also joined.
The impudence of the so-called investors was so great that these people openly ignored the requirements and laws of the countries in whose territory they extracted oil. Moreover, the Americans and British began to control natural resources and economic activity powers that have oil in their land. And in 1960, the first serious victory of states that opened their mineral resources to foreigners occurred, since OPEC was created. This turn of events was greatly facilitated by both the situation in the Middle East itself and the international economic situation.
Moreover, in most oil-producing countries, oil is the main source of attracting foreign currency. Due to the extremely backward structure of the economy, the foreign trade operations of these states are based only on oil. For example, in the UAE, Libya and Saudi Arabia, the share of petroleum products in their own exports is 100%. In Iraq this figure is 99%, Qatar - 98%, Kuwait, Iran, Nigeria - 93%, Algeria - 85%, Gabon - 77%, Indonesia - 69%.
The struggle for independence
The countries that are part of OPEC today were dependent states half a century ago and therefore tried in every possible way to get rid of the foreign yoke. This situation, of course, contributed to a significant convergence of their interests. However, none of the oil states could defeat the so-called investors on their own. In particular, in 1951, Iran attempted to nationalize the Anglo-Iranian Oil Corporation on its territory, but immediately came under crazy economic pressure from the United States, Great Britain and the International Oil Cartel, which was then still very powerful.
Timid steps
Back in 1949, some rapprochement between oil-producing countries took place on the initiative of Venezuela. This power made contact with the states of the Middle East and proposed to find ways for further mutually beneficial cooperation. But unfortunately, this idea failed then, since the Arab partners were not yet truly independent and had different monarchical regimes that were not very willing to engage in full-fledged dialogue. Largely because of this, Venezuela's initiative failed.
In 1959, oil companies unilaterally lowered the price of raw materials. And therefore, Venezuela alone lost at that moment a colossal amount of money for that time - $140 million. This state of affairs led to oil exporters uniting and holding the First Arab Petroleum Congress, which was held in Cairo. Its participants demanded in the final resolution that companies must consult with the leadership of oil-producing powers before making any decision regarding cost. It was also proposed to create an advisory commission on oil issues.
New player
On September 14, 1960, OPEC was created in Baghdad. The organization initially consisted of only five countries, but over the years it expanded to 12. Each state within OPEC achieved the right to independently control its natural resources and exploit them taking into account exclusively national interests. On September 1, 1965, the Secretariat of this international organization.
How it works?
The composition of OPEC has changed several times over the years of its existence. However, to this day, the main governing bodies of the organization are:
- Conference.
- Advice.
- Secretariat.
The conference is the most influential body, and the highest position is general secretary. Occurs twice a year business meetings ministers of energy and other relevant specialists. But in any case, the main task of these meetings is to determine the state of the international oil market. In addition, cartel members are developing a clear plan to keep the situation stable. Also, special attention is paid to forecasting the future situation on the oil market.
Note that OPEC, consisting of 12 countries, had most of the oil fields in the world. In the 1990s, Gabon left the organization, and Ecuador independently decided to suspend its membership in this alliance until October 2007. The Russian Federation received observer status of the organization in 1998.
In the cartel there is such a thing as the OPEC “basket”. In short, this term implies the arithmetic average of the prices of those types of oil that are produced on the lands of the organization’s member states.
Let's list the countries that are part of OPEC. The list of these powers today is as follows:
- Iran.
- Iraq.
- Kuwait.
- Algeria.
- Angola.
- Gabon.
- Libya.
- Qatar.
- Nigeria.
- Ecuador.
- Saudi Arabia.
- Equatorial Guinea.
Last meetings
At the beginning of 2016, OPEC members met with the goal of reaching an agreement that could satisfy all participants. However, the Saudis did not even hide the fact that they do not even plan to discuss reducing the level of their own oil production. Iran shared the same opinion.
On the last day of November 2017, another meeting of the organization was held, but again it was not possible to reach an optimal agreement. In this regard, experts are of the opinion that oil prices are unlikely to stabilize in 2018.
In 2015 Russian Federation it was proposed to join OPEC as a full member, but the former post-Soviet state responded with a decisive refusal.
OPEC (Organization of Petroleum Exporting Countries) was formed in 1961 at a conference in Baghdad.
What is OPEC is an interstate organization that was created by oil-producing countries in order to establish control over oil production in their region, unite the efforts of countries and control oil prices.
Five countries proposed creating such an organization: Venezuela, Saudi Arabia, Kuwait, Iran and Iraq.
This was due to the fact that in the 60s of the 20th century the process of decolonization began, new independent states, and the main world share of oil production was owned by 7 transnational corporations, which set their own rules and at one point significantly reduced purchase prices for oil.
The newly independent states wanted to govern their own natural resources and do this only for the benefit of their state and society. Since oil was oversupplied at the time, measures were needed to prevent a subsequent fall in prices. In this connection, OPEC approved its oil production program and created its own body - the Secretariat, which is currently located in Vienna.
Opinion: OPEC is a consequence. The desire to concentrate the management of the oil industry in a single block, to unify processes, to ensure an uninterrupted supply of raw materials to developed countries and world factories. Also this powerful tool impact on world economy, on Russia, through manipulation of oil production volumes and prices.
Initially, OPEC consisted of 5 founding countries. Subsequently, they were joined by 5 more: the UAE, Qatar, Libya, Indonesia and Algeria. At the moment, 12 countries are represented in OPEC: Venezuela, Kuwait, Iran, Iraq, UAE, Libya, Algeria, Ecuador, Equatorial Guinea, Gabon and Angola.
Indonesia became an oil importer and left OPEC. In 2018, Qatar announced its withdrawal from OPEC. In 2015, Russia was invited to join OPEC, but the Russian Federation refused.
IN Lately has become an important tool political influence. The economies of some countries are very dependent on current oil prices and when they fall, they suffer colossal losses.
Some OPEC countries (Nigeria, Angola, Iraq, Kuwait), despite large volumes of oil production, have weak economic systems, large external debts and often engage in unjustified military conflicts (for example, the Kuwaiti invasion of Iraq in 1990). In Venezuela for a long time There was the dictatorship of Hugo Chavez, which was replaced by his follower Muduro. Therefore, OPEC countries are faced with great difficulties, and even control of 2/3 of world oil reserves does not allow stabilizing the situation in the economy and political sphere.
The opinion is often circulated that OPEC is not a cartel at all, and this organization has long lost real leverage over the price of oil. Meanwhile, market observations in the context of OPEC meetings and decisions show the fallacy of this opinion.
Opinion: OPEC conspiracies to increase oil prices cause negativity in developed countries (does not count), backlash— growth of alternative energy: wind, sun. The transition to electric vehicles is accelerating. The world is tired of depending on a handful of countries.
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