Organization of the Petroleum Exporting Countries
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| Organization of the Petroleum Exporting Countries | |
 | |
| Basic facts | |
| Location: | Vienna, Austria |
| Type: | Intergovernmental organization |
| Affiliation: | Nonpartisan |
| Top official: | Abdallah Salem el-Badri, Secretary General |
| Founder(s): | Iran, Iraq, Kuwait, Saudi Arabia, Venezuela |
| Year founded: | 1960 |
| Employees: | 139 |
| Website: | Official website |
| Promoted policies | |
| Energy Policy | |
The Organization of the Petroleum Exporting Countries (OPEC) is an international, intergovernmental membership organization that aims to represent the interests of nations with substantial net exports of crude oil.
OPEC works to coordinate the petroleum policies of its members and stabilize oil markets in order to ensure revenue for oil producers and investors. The organization, headquartered in Vienna, Austria, has 13 member countries located primarily in the Middle East and Africa.[1]
Mission[edit]
According to OPEC's website, the organization has the following mission:[2]
| “ |
...to coordinate and unify the petroleum policies of its Member Countries and 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. [3] |
” |
| —OPEC[2] | ||
History[edit]
OPEC was formed in September 1960 at the Baghdad Conference in Iraq. The organization originally had five members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Originally located in Geneva, Switzerland, the group's headquarters was moved to Vienna, Austria in September 1965. By 1969, OPEC had 10 member countries, and by 1975 it had 13.[1]
Only one nation, Gabon, has left OPEC entirely, ending its 20-year membership in 1995. Ecuador and Indonesia suspended their memberships for 15- and 7-year periods, respectively, but have since both become full members again.[1]
Work[edit]
- See also: Gasoline prices
Member states of the Organization of the Petroleum Exporting Countries convene semiannual and special meetings to coordinate policies on oil prices and production. OPEC's primary strategy has been to coordinate oil production targets among its member states in order to influence the world price of oil and increase revenues for oil producers. Collusion allows OPEC members to collectively leverage their control over oil supplies to push prices higher than they might otherwise be. According to the U.S. Energy Information Administration:[4][5]
 |
| “ |
OPEC member countries produce about 40 percent of the world's crude oil. Equally important to global prices, OPEC's oil exports represent about 60 percent of the total petroleum traded internationally. Because of this market share, OPEC's actions can, and do, influence international oil prices. In particular, indications of changes in crude oil production from Saudi Arabia, OPEC's largest producer, frequently affect oil prices. [3] |
” |
| —U.S. Energy Information Administration[5] | ||
However, some sources do not consider OPEC to be an effective cartel. According to Encyclopedia Britannica, scholars who argue that OPEC is relatively ineffective at influencing oil prices "emphasize the sovereignty of each member country, the inherent problems of coordinating price and production policies, and the tendency of countries to renege on prior agreements at ministerial meetings."[4]
OPEC Secretariat[edit]
The headquarters and sole office of OPEC, the OPEC Secretariat, is located in Vienna, Austria. The group claims to employ 139 people from 38 different countries, and its official working language is English.[6]
According to the OPEC website, the Secretariat "is responsible for the implementation of all resolutions passed by the Conference and carries out all decisions made by the Board of Governors." It also conducts research and public relations activities. The Secretariat has five divisions:[7]
- Office of the Secretary General
- Legal Office
- General Legal Counsel
- Internal Auditor
- Research Division
- Data Services
- Petroleum Studies
- Energy Studies
- Support Services Division
- Public Relations & Information
- Finance & Human Resources
- Administration & IT Services
OPEC Fund for International Development[edit]
In January 1976, the OPEC Fund for International Development (OFID) was established, following agreements at the 1975 Summit of the Sovereigns and Heads of State of the OPEC Member Countries in Algiers, Algeria. OFID functions as an international development agency funded by the OPEC member states. It began with $800 million in funding, which has since been replenished four times, most recently in 2011.[8]
OFID assists developing nations, primarily in Africa, Asia, Latin America, and the Caribbean, through four key programs:
- Public sector lending - provides loans to developing governments
- Private sector facility - supporting private entities
- Trade financing facility - provides access to credit and risk-sharing
- Grant making - for humanitarian and social development groups
OFID has also directed nearly $1 billion to the International Fund for Agricultural Development (IFAD) and the Trust Fund of the International Monetary Fund (IMF). In 2008, OFID began work on its "Energy for the Poor" initiative following a mandate at the 2007 OPEC Summit in Saudi Arabia.[8]
Member countries[edit]
As of 2016, 13 countries belonged to OPEC. Below is a list of all present and former members of the organization and the terms of their membership:[9]
- Iran (1960-present)
- Iraq (1960-present)
- Kuwait (1960-present)
- Saudi Arabia (1960-present)
- Venezuela (1960-present)
- Qatar (1961-present)
- Indonesia (1962-2009; 2016-present)
- Libya (1962-present)
- United Arab Emirates (1967-present)
- Algeria (1969-present)
- Nigeria (1971-present)
- Ecuador (1973-1992; 2007-present)
- Angola (2007-present)
- Gabon (1975-1995)
Membership requirements[edit]
OPEC recognizes three types of member states:[9]
- Founder Members - the original five members of OPEC: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
- Full Members - "countries whose applications for membership have been accepted by the Conference."
- Associate Members - "those countries that do not qualify for full membership, but are nevertheless admitted under such special conditions as may be prescribed by the Conference."
The requirements for full membership in OPEC are as follows:[9]
| “ |
any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members. [3] |
” |
Leadership[edit]
According to Encyclopedia Britannica, OPEC is managed by a Board of Governors comprised of representatives from each member country. The Board convenes the OPEC Conference, organizes meetings where oil policies are coordinated, and sets the organization's annual budget. The Chairman of the Board of Governors, elected by the OPEC Conference, serves a one-year term.[4]
The OPEC Secretariat in Vienna, Austria, which conducts the organization's daily activities, is administered by a Secretary General. Candidates for this position are nominated by OPEC member countries and appointed by the OPEC Conference to serve for a three-year period, which may be renewed once. The current Secretary General of OPEC is Abdalla Salem el-Badri of Libya.[10]
Media[edit]
Recent news[edit]
The link below is to the most recent stories in a Google news search for the terms 'Organization of the Petroleum Exporting Countries' OPEC. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.
See also[edit]
External links[edit]
- OPEC official website
- OPEC Multimedia channel on YouTube
- OFID - OPEC Fund for International Development
Footnotes[edit]
- ↑ 1.0 1.1 1.2 OPEC, "Brief History," accessed June 28, 2016
- ↑ 2.0 2.1 OPEC, "Our Mission," accessed June 28, 2016
- ↑ 3.0 3.1 3.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 4.0 4.1 4.2 Encyclopedia Britannica, "OPEC," accessed June 28, 2016
- ↑ 5.0 5.1 U.S. Energy Information Administration, "Supply: OPEC," accessed June 29, 2016
- ↑ OPEC, "Employment Information," accessed June 28, 2016
- ↑ OPEC, "Secretariat," accessed June 28, 2016
- ↑ 8.0 8.1 OPEC, "OFID: The OPEC Fund for International Development," accessed June 28, 2016
- ↑ 9.0 9.1 9.2 OPEC, "Member Countries," accessed June 28, 2016
- ↑ OPEC, "Secretary General," accessed June 28, 2016
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