Supervisor of activities. Opek: decoding and functions of the organization
OPEC countries and their capitals on the map (list 15) → members of the Organization of Petroleum Exporting Countries (OPEC). Below is a table of OPEC participating countries + map, capital, alphabetical list, flags and continents, in English and Russian
No. Flag | Letter | A country | Capital | Continent | Letters |
1 | A | Algeria | Algeria | Africa | 5 |
2 | A | Angola | Luanda | Africa | 6 |
3 | IN | Venezuela | Caracas | South America | 9 |
4 | G | Gabon | Libreville | Africa | 5 |
5 | AND | Iraq | Baghdad | Asia | 4 |
6 | AND | Iran | Tehran | Asia | 4 |
7 | TO | Congo | Brazzaville | Africa | 5 |
8 | TO | Kuwait | Kuwait City | Asia | 6 |
9 | TO | Qatar | Doha | Asia | 5 |
10 | L | Libya | Tripoli | Africa | 5 |
11 | ABOUT | UAE | Abu Dhabi | Asia | 8 |
12 | N | Nigeria | Abuja | Africa | 7 |
13 | WITH | Saudi Arabia | Riyadh | Asia | 17 |
14 | E | Equatorial Guinea | Malabo | Africa | 21 |
15 | E | Ecuador | Quito | South America | 7 |
Presentation with flags for children and adults: the capitals of 15 OPEC countries. The ability to sort the table alphabetically, select the necessary neighboring states around and their capitals, friendly and unfriendly. Go to a detailed map in Russian, look at the surroundings of the city, show border areas nearby, find and write down the names. How many adjacent states are neighbors of the 1st and 2nd order, their location in the region, as indicated
See on the diagram who they are neighbors with and the places nearby, where the nearest city on the border is located. List the names of continents and parts of the world, surrounding seas and oceans. Find out the number of letters in the name and which one it starts with, who is a member of the association of oil exporters from their continent
What is OPEC? International Organization of Petroleum Exporting Countries
Goals: coordination of activities and control of oil production volumes, stabilization of the oil products market and oil prices. For this purpose, the countries included in the cartel meet twice a year at OPEC conferences. Russia has been an observer in the OPEC system since 1998. The headquarters of the organization is Vienna, Austria. The next meeting will take place on December 5, 2018.
Full composition - which countries are part of OPEC + capital:
- Algiers, Algeria
- Angola, Luanda
- Venezuela, Caracas
- Gabon, Libreville
- Iran, Tehran
- Iraq, Baghdad
- Congo, Brazzaville
- Kuwait, Kuwait City
- Qatar, Doha
- Libya, Tripoli
- United Arab Emirates, Abu Dhabi
- Nigeria, Abuja
- Saudi Arabia, Riyadh
- Equatorial Guinea, Malabo
- Ecuador, Quito
All OPEC conference members in English:
Full list - OPEC countries on the map and capitals
The table is alphabetical, it contains all the world's largest oil exporters, which are located on three continents of the earth - Asia, South America, Africa. Conference participants by continent:
According to the list, a group of fifteen participating states at an international conference in Austria, Europe. An interactive map of their location in the world is also presented.
Now you know which countries are part of the organization of oil exporting countries OPEC, you can list and show them on the world map 2019
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 Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) year), 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 of economic development and well-being of Russians depends on its sale. 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.
Trusteeship countries
The abbreviation OPEC stands for "Association of Petroleum Exporting Countries". The main goal of the organization was to regulate prices for black gold on the world market. The need to create such an organization was obvious. In the middle of the 20th century, oil prices began to fall due to market glut. The Middle East sold the most oil. It was there that the richest deposits of black gold were discovered.
In order to pursue a policy to maintain oil prices on a global scale, it was necessary to force oil-producing countries to reduce the rate of its production. This was the only way to remove excess hydrocarbons from the world market and raise prices. OPEC was created to solve this problem.
List of countries that are members of OPEC
Today, 14 countries take part in the organization’s work. Consultations between representatives of the organization are held twice a year at OPEC headquarters in Vienna. At such meetings, decisions are made to increase or decrease oil production quotas for individual countries or the entire OPEC.
Venezuela is considered the founder of OPEC, although this country is not a leader in oil production. The palm in terms of volumes belongs to Saudi Arabia, followed by Iran and Iraq. In total, OPEC controls about half of the world's black gold exports. In almost all member countries of the organization, the oil industry is the leading industry in the economy. Therefore, the decline in world oil prices causes a strong blow to the income of OPEC members.
African countries that are part of OPEC
Of the 54 African states, only 6 are members of OPEC:
Most of the “African” OPEC participants joined the organization in the 1960-1970s. At that time, many African states freed themselves from the colonial rule of European countries and gained independence. The economy of these countries was focused mainly on the extraction of minerals and their subsequent export abroad. African countries are characterized by high populations but also high rates of poverty. To cover the costs of social programs, the governments of these countries are forced to produce a lot of crude oil. In order to withstand competition from European and American oil-producing transnational corporations, African countries joined OPEC.
Asian countries included in OPEC
Political instability in the Middle East predetermined the entry of Iran, Saudi Arabia, Kuwait, Iraq, Qatar, and the United Arab Emirates. The organization's Asian member countries are characterized by low population density and huge foreign investment. Oil revenues are so enormous that Iran and Iraq paid for their military expenses in the 1980s by selling oil. Moreover, these countries fought against each other.
Today, political instability in the Middle East threatens not only the region itself, but also threatens world oil prices. There is a civil war in Iraq and Libya. The lifting of sanctions from Iran threatens to increase oil production in this country, despite the obvious exceeding of the OPEC oil production quota.
Latin American countries that are members of OPEC
Only two Latin American countries are members of OPEC - Venezuela and Ecuador. Despite the fact that Venezuela is the country that initiated the founding of OPEC, the state itself is politically unstable. Recently (in 2017), a wave of anti-government protests swept across Venezuela due to the government’s ill-conceived economic policies. Recently, the country's public debt has increased significantly. For some time, the country kept afloat due to high oil prices. But as prices fell, the Venezuelan economy also collapsed.
Non-OPEC oil exporting countries
Recently, OPEC has lost its leverage over its members. This situation is largely due to the fact that several oil importing countries that are not members of OPEC have appeared on the world market.
First of all this:
Despite the fact that Russia is not a member of OPEC, it is a permanent observer in the organization. An increase in oil production by non-OPEC countries leads to a decrease in the price of oil on the world market. However, OPEC cannot influence them, since even members of the organization do not always comply with agreements and exceed permissible quotas.
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general information
OPEC countries meeting
Which states are included?
Oil production in Iran
- tourism;
- timber extraction;
- gas sales;
- sale of other raw materials.
Organization policy
Meeting of OPEC member countries
Attempts to resolve the situation
Falling oil prices
Price policy
Extraordinary meeting
OPEC meeting in Vienna
Finally
Countries that are part of OPEC
Last September, OPEC celebrated its anniversary. It was created in 1960. Today, OPEC countries occupy a leading position in the field of economic development.
general information
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.
OPEC countries meeting
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. 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 Venezuela. Initially, the list included it, as well as the leading oil exporting states. After this, the list was replenished with Qatar and Indonesia. Libya was included in the list not during the time of Colonel Gaddafi, as many people think, but under King Idris, in 1962. The Emirates entered the list only in 1967.
In the period 1969-1973. the list was supplemented by such members as Algeria, Nigeria and Ecuador. In 1975, Gabon joined the list. In 2007, Angola joined the list. It is not known for certain whether OPEC will be added to the list in the near future.
Countries that are part of OPEC
What are countries?
The states that are part of this organization in 2018 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 throughout 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.
The second place in gold production is given to Iran. Today this state, a major oil exporter, occupies 5.5% of the world market. Kuwait should be considered an equally large exporter. The extraction of black gold brings the country 90% of its profits.
Oil production in Iran
Until 2011, Libya occupied an enviable place in oil production. Today the situation in this once richest state can be called not just difficult, but critical.
Iraq has the third largest oil reserves. 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 the states that are members of OPEC are dependent on the profits that their oil industry brings. The only exception among these 12 states is Indonesia. This country also receives income from such industries as:
- tourism;
- timber extraction;
- gas sales;
- sale of other raw materials.
Indonesia as part of OPEC countries
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.
Organization policy
This happens due to the development of new technologies that help save resources.
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. Another important goal is to achieve a fair return on capital. This is relevant for those who actively invest in industry.
The main governing bodies of OPEC include:
The conference is the highest body of this organization. The highest position should be considered the position of Secretary General.
Meeting of OPEC member countries
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 the latest information, the plans of the management of this organization have 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
Falling oil prices
After the start of another economic crisis that gripped the whole world, OPEC countries decided to meet in December 2015. Before this, 12 states met in June 2015, when there was a record drop in black gold futures. Then the size of the fall was catastrophic - up to 25 percent.
Judging by the forecast given by the organization’s experts at the end of 2015, the crisis will not affect only Qatar. In 2016, 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 held in December 2015, Venezuela made a proposal to reduce current oil production to 5 percent. This information has not yet been confirmed.
Saudi Arabian Oil Minister Ali al-Naimi
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 per year. The previous five-year plan showed much higher indicators. Then the annual income of these countries is 1 trillion. US dollars.
Extraordinary meeting
According to the Minister of Oil Industry of Iran, the existing problem can only be solved in the long term.
In February 2016, a decision was made to hold another meeting. The initiative was taken by six OPEC members:
The Russian Federation and Oman were also supposed to take part in the discussion. The objective of the extraordinary meeting was to conclude an agreement that would suit all participants of the 2016 meeting.
OPEC meeting in Vienna
One of the largest oil exporters, Saudi Arabia, did not hide the fact that it was not going to discuss lowering production with other OPEC members and “observers.” Iran also plans to significantly increase its production volumes. Today this state declares that its plans are to increase the volume to 500 thousand barrels/day.
On November 30, 2017, a new meeting of the member countries of the organization was held. Unfortunately, it was again impossible to accept the agreement. According to experts, the situation with oil prices in 2017 and 2018 will not stabilize.
Finally
OPEC headquarters building in Vienna
In 2018, members of the organization will adhere to the traditional course. Presumably, some restrictions are planned. But the hypothetical “sanctions” will most likely be symbolic. This is because countries will not comply with the proposed restrictions.
Trusteeship countries 2018 list
The Organization of Petroleum Exporting Countries and Non-Cartel Countries (OPEC+) has concluded that the decision to extend the deal to reduce oil production in 2018 must be left unchanged. This was reported by TASS with reference to Russian Energy Minister Alexander Novak, who on Sunday took part in a meeting of the OPEC+ monitoring committee in the Omani capital Muscat.
“The main conclusion of today’s meeting: we once again confirm the need for and commitment to the agreements that were reached on November 29–30 for the entire period of 2018,” said the head of the Russian department.
He explained the decision taken by the ministers by the fact that the market has not yet reached a balance between demand and supply of oil. Giving forecasts for the year, Novak said that Russia is optimistic about the degree to which participants will implement the OPEC+ deal, which was 107% implemented in the previous year. The minister also added that the deal is effective and brings results.
Novak pointed out that average oil prices in 2017 were 30% higher than the year before. After this fall, experts recorded an increase in investment in the industry by 6%. Also last year, according to the head of the Russian energy department, there was an increase in oil demand by 1.5 million barrels. per day - this turned out to be higher than predicted.
Before the start of the negotiations, Novak told reporters that oil prices are not the only factor in the decision of OPEC+ member countries on a possible withdrawal from the agreement to reduce production.
“The price factor is not the only factor when you need to start exiting a deal. We will look at the market situation. We don't want any individual indicators as indicators. There must be a complete recovery of the market,” he answered the relevant question.
(The Organization of the Petroleum Exporting Countries, OPEC) is an international organization created to coordinate sales volumes and set prices for crude oil.
By the time OPEC was founded, there was a significant surplus of oil on the market, the emergence of which was caused by the beginning of the development of giant oil fields - primarily in the Middle East. In addition, the Soviet Union entered the market, where oil production doubled from 1955 to 1960. This abundance has caused severe competition in the market, leading to a constant decline in prices. The current situation was the reason for the unification of several oil exporting countries into OPEC in order to jointly resist transnational oil corporations and maintain the required price level.
OPEC as a permanent organization was created at a conference in Baghdad on September 10-14, 1960. Initially, the organization included Iran, Iraq, Kuwait, Saudi Arabia and Venezuela - the initiator of the creation. The countries that founded the organization were later joined by nine more: Qatar (1961), Indonesia (1962-2009, 2016), Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973) -1992, 2007), Gabon (1975-1995), Angola (2007).
Currently, OPEC has 13 members, taking into account the emergence of a new member of the organization - Angola and the return of Ecuador in 2007 and the return of Indonesia from January 1, 2016.
The goal of OPEC is to coordinate and unify the oil policies of member countries to ensure fair and stable oil prices for producers, efficient, economical and regular supplies of oil to consumer countries, as well as a fair return on capital for investors.
The organs of OPEC are the Conference, the Board of Governors and the Secretariat.
The highest body of OPEC is the Conference of Member States, convened twice a year. It determines the main directions of OPEC's activities, decides on the admission of new members, approves the composition of the Board of Governors, considers reports and recommendations of the Board of Governors, approves the budget and financial report, and adopts amendments to the OPEC Charter.
The executive body of OPEC is the Governing Council, formed from governors who are appointed by states and approved by the Conference. This body is responsible for managing the activities of OPEC and for implementing the decisions of the Conference. Meetings of the Board of Governors are held at least twice a year.
The Secretariat is headed by the Secretary General, appointed by the Conference for three years. This body carries out its functions under the guidance of the Board of Governors. It facilitates the work of the Conference and the Governing Council, prepares communications and strategic data, and disseminates information about OPEC.
The highest administrative official of OPEC is the Secretary General.
The acting Secretary General of OPEC is Abdullah Salem al-Badri.
OPEC headquarters is located in Vienna (Austria).
According to current estimates, more than 80% of the world's proven oil reserves are found in OPEC member countries, with 66% of OPEC countries' total reserves concentrated in the Middle East.
Proven oil reserves of OPEC countries are estimated at 1.206 trillion barrels.
As of March 2016, OPEC oil production reached 32.251 million barrels per day. Thus, OPEC exceeds its own production quota, which is 30 million barrels per day.
The Organization of the Petroleum Exporting Countries, abbreviated as OPEC, (English OPEC, The Organization of the Petroleum Exporting Countries) is a cartel created by oil-producing powers to stabilize oil prices. Members of this organization are countries whose economies largely depend on revenues from oil exports. The main goal of the organization is control over world oil prices
OPEC was formed at an international conference on September 10-14, 1960 in Baghdad (Iraq). Initially, this organization included five countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Eight more new members were admitted between 1960 and 1975: Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador and Gabon. In December 1992, Ecuador left OPEC, and in January 1995, Gabon was expelled from it.
OPEC, as a permanent non-governmental organization, was created at a conference in Baghdad (Iraq) on September 10-14, 1960. Initially, the organization included Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. These five founding countries were later joined by nine more: Qatar (1961), Indonesia (1962), Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973-- 1992), Gabon (1975--1994), Angola (2007).
The OPEC Charter was approved at the 2nd conference in Caracas on January 15-21, 1961. In 1965, the charter was completely revised. Later, numerous changes and additions were also made to it.
OPEC was established after the Seven Sisters, a cartel that united British Petroleum, Chevron, Exxon, Gulf, Mobil, Royal Dutch/Shell and Texaco and controlled the refining of crude oil and the sale of petroleum products throughout the world, unilaterally reduced purchase prices for oil, based on which they paid taxes and interest for the right to develop natural resources to oil-producing countries.
The initiator of the creation of the organization was Venezuela, the most developed of the oil-producing countries, which for a long time was subject to exploitation by oil monopolies. Understanding of the need to coordinate efforts against oil monopolies was also brewing in the Middle East. This was evidenced by the Iraqi-Saudi agreement on harmonizing Oil Policy in 1953 and the meeting of the Arab League in 1959, dedicated to oil problems, which was attended by representatives of Iran and Venezuela.
The immediate impetus that led to the creation of the Petroleum Exporters Association was another reduction in reference prices in 1959 by the International Petroleum Cartel, as well as the imposition of restrictions on oil imports into the United States.
The headquarters of OPEC was initially located in Geneva (Switzerland), then on September 1, 1965 it moved to Vienna (Austria).
The main goals of creating the Organization are:
- 1) coordination and unification of the oil policy of the member states;
- 2) determining the most effective individual and collective means of protecting their interests;
- 3) ensuring price stability on world oil markets;
- 4) attention to the interests of oil-producing countries and the need to provide: oil exporter Russia energy supply
- · sustainable incomes of oil-producing countries;
- · efficient, cost-effective and regular supply of consumer countries;
- · fair income from investments in the oil industry;
- · environmental protection in the interests of current and future generations.
- · cooperation with non-OPEC countries in order to implement initiatives to stabilize the global oil market.
Thus, the main goal of OPEC is the unified protection of its economic interests. In essence, OPEC laid the foundation for interstate regulation in the energy sector in relation to the global oil market.
Only founding members and those countries whose applications for admission have been approved by the conference can be full members.
Any other country that exports crude oil on a significant scale and has interests fundamentally similar to those of the member countries may become a full member, provided that its admission is approved by a 3/4 majority, including the votes of all founding members.
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.
OPEC member countries control about 2/3 of the world's oil reserves. They account for 40% of world production or half of world oil exports. Peak oil has not yet been passed only by OPEC countries and Russia (among the major exporters).
Major oil exporters such as Brunei, Great Britain, Mexico, Norway, Oman and the Soviet Union, and later Russia, were never members of OPEC.
One of OPEC's tasks is to represent a unified position of oil-producing countries on the world oil market. From 1960 to 1973, the Organization could not really influence the balance of power in the oil market. The situation changed in the first half of the 1970s, when the Western world faced increasing inflation and a shortage of raw materials. The problem of oil shortage has become apparent. For example, the United States was forced to import about 35% of its petroleum products. At this time, OPEC began to defend its position regarding the principles of profit sharing in the oil market.
In October 1973, the Organization imposed an embargo on oil supplies to the United States in response to the latter's support for Israel in the war with Syria and Egypt. A barrel of oil rose in price from $3 to $5.11. By the end of the 70s, oil consumption began to decline for a number of reasons: the activity of non-OPEC countries in the oil market increased; a general decline in the economies of Western countries began to appear; decline in energy consumption. Oil prices began to decline.
During the 1970s, the price of oil continued to rise, as did the price of base metals, rubber, wheat and cotton. The increase in oil prices caused a boomerang effect and led to an increase in the prices of almost all goods and services. In 1974, the consumer price index rose 11%, so in 1975 President Ford was forced to enact an anti-inflation program.
Oil revenues for major Arab oil-producing countries, 1973-1978. grew at an unprecedented pace. For example, the income of Saudi Arabia increased from $4.35 billion to $36 billion, Kuwait - from $1.7 billion to $9.2 billion, Iraq - from $1.8 billion to $23.6 billion.
However, by the end of the 70s, oil consumption began to decline for a variety of reasons. Firstly, the activity of non-OPEC countries has increased in the oil market. Secondly, a general decline in the economies of Western countries began to appear. Third, efforts to reduce energy consumption have borne some fruit. In addition, the United States, concerned about possible shocks in oil-producing countries due to the high activity of the USSR in the region, especially after the introduction of Soviet troops into Afghanistan, was ready to use military force if the situation with oil supplies recurred. Eventually, oil prices began to decline.
After the 1973 embargo, Kissinger and Nixon began searching for a partner in the Middle East. Their choice was Iran, which did not take part in the embargo against the United States. Iran allowed ships to refuel in its ports and supported the US position towards the USSR. However, despite all the measures taken, the second oil crisis broke out in 1978. The main reasons were the revolution in Iran and the political resonance that the Camp David agreements caused between Israel and Egypt. By 1981, the price of oil reached $40 per barrel.
Ultimately, market forces, the active development of energy conservation programs in Western countries and disagreements among OPEC members led to lower oil prices. Since 1981, the price of oil has been gradually falling, until recently. And although just recently it seemed that the 1981 level was unlikely to be reached in the foreseeable future, the situation has not only worsened, it has gotten out of control. It appears that the necessary lessons have not been learned from the past.
OPEC's weakness was fully revealed in the early 1980s, when, as a result of the full-scale development of new oil fields outside OPEC countries, widespread adoption of energy-saving technologies and economic stagnation, demand for imported oil in industrialized countries fell sharply and prices fell by almost half.
The main disadvantage of OPEC is that it brings together countries whose interests are often opposing.
Saudi Arabia and other countries on the Arabian Peninsula are sparsely populated but have vast oil reserves, large foreign investments and very close relationships with Western oil companies.
Other OPEC countries, such as Nigeria, have high populations and poverty, have expensive economic development programs, and are heavily indebted. These countries are forced to produce and sell as much oil as possible.
Countries included in OPEC belong to different groups. The radical group includes Iraq, Iran, Libya and Algeria. They traditionally advocate setting prices at the highest possible level. The rest of the countries can be classified as moderate, which accordingly advocates moderate policies. Oil exporting countries realized that by regulating production volumes they could control oil prices, but also oil importing countries, and in a number of cases, oil monopolies, did everything to prevent let OPEC curb the growth of oil supply. In their pressure on OPEC, oil importing countries, and primarily the United States, have used and are using objective differences between OPEC member countries on the issue of expanding oil production. Many researchers emphasize the US desire to disrupt the unity of oil-producing countries and exclude the possibility of their joint actions. American capital, by hook or by crook, sought to strengthen its position in some oil-producing countries.
The Organization of the Petroleum Exporting Countries, founded in 1960 by a number of countries (Algeria, Ecuador, Indonesia, Iraq, Iran, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela) with the purpose of coordinating the volume of sales and setting prices for crude oil. oil.
Due to the fact that OPEC controls approximately half of the world's oil trade, it is able to significantly influence the level of world prices. The oil cartel, which was registered with the UN as a full-fledged intergovernmental organization in 1962, accounts for about 40% of world oil production.
Brief economic characteristics of OPEC member states (in 2005)
Algeria | Indonesia | Iran | Iraq | Kuwait | Libya | Nigeria | Qatar | Saudi Arabia | UAE | Venezuela | |
Population (thousand people) | 32,906 | 217,99 | 68,6 | 28,832 | 2,76 | 5,853 | 131,759 | 824 | 23,956 | 4,5 | 26,756 |
Area (thousand km 2) | 2,382 | 1,904 | 1,648 | 438 | 18 | 1,76 | 924 | 11 | 2,15 | 84 | 916 |
Population density (persons per km 2) | 14 | 114 | 42 | 66 | 153 | 3 | 143 | 75 | 11 | 54 | 29 |
GDP per capita ($) | 3,113 | 1,29 | 2,863 | 1,063 | 27,028 | 6,618 | 752 | 45,937 | 12,931 | 29,367 | 5,24 |
GDP at market prices (millions of $) | 102,439 | 281,16 | 196,409 | 30,647 | 74,598 | 38,735 | 99,147 | 37,852 | 309,772 | 132,15 | 140,192 |
Export volume (million $) | 45,631 | 86,179 | 60,012 | 24,027 | 45,011 | 28,7 | 47,928 | 24,386 | 174,635 | 111,116 | 55,487 |
Oil export volume (million $) | 32,882 | 9,248 | 48,286 | 23,4 | 42,583 | 28,324 | 46,77 | 18,634 | 164,71 | 49,7 | 48,059 |
Current balance ($ million) | 17,615 | 2,996 | 13,268 | -6,505 | 32,627 | 10,726 | 25,573 | 7,063 | 87,132 | 18,54 | 25,359 |
Proven oil reserves (million barrels) | 12,27 | 4,301 | 136,27 | 115 | 101,5 | 41,464 | 36,22 | 15,207 | 264,211 | 97,8 | 80,012 |
Proven natural gas reserves (billion cubic meters) | 4,58 | 2,769 | 27,58 | 3,17 | 1,557 | 1,491 | 5,152 | 25,783 | 6,9 | 6,06 | 4,315 |
Crude oil production volume (1,000 bbl/day) | 1,352 | 1,059 | 4,092 | 1,913 | 2,573 | 1,693 | 2,366 | 766 | 9,353 | 2,378 | 3,128 |
Natural gas production volume (million cubic meters/day) | 89,235 | 76 | 94,55 | 2,65 | 12,2 | 11,7 | 21,8 | 43,5 | 71,24 | 46,6 | 28,9 |
Oil refining capacity (1,000 bbl/day) | 462 | 1,057 | 1,474 | 603 | 936 | 380 | 445 | 80 | 2,091 | 466 | 1,054 |
Petroleum products production (1,000 barrels/day) | 452 | 1,054 | 1,44 | 477 | 911 | 460 | 388 | 119 | 1,974 | 442 | 1,198 |
Consumption of petroleum products (1,000 bbl/day) | 246 | 1,14 | 1,512 | 514 | 249 | 243 | 253 | 60 | 1,227 | 204 | 506 |
Crude oil export volume (1,000 bbl/day) | 970 | 374 | 2,395 | 1,472 | 1,65 | 1,306 | 2,326 | 677 | 7,209 | 2,195 | 2,198 |
Petroleum products export volume (1,000 bbl/day) | 464 | 142 | 402 | 14 | 614 | 163 | 49 | 77 | 1,385 | 509 | 609 |
Volume of natural gas exports (million cubic meters) | 64,266 | 36,6 | 4,735 | -- | -- | 5,4 | 12 | 27,6 | --7,499 | -- |
Main goals of OPEC
The main goals of creating the Organization are:
- Coordination and unification of the oil policies of the member states.
- Determining 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; environmental protection in the interests of present and future generations.
- cooperation with non-OPEC countries in order to implement initiatives to stabilize the world oil market.
Only founding members and those countries whose applications for admission have been approved by the conference can be full members. Any other country that exports crude oil on a significant scale and has interests fundamentally similar to those of the member countries may become a full member, provided that its admission is approved by a 3/4 majority, including the votes of all founding members.
Organizational structure of OPEC
The highest body of OPEC is the Conference of Ministers of the states that are members of the organization; there is also a 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.
The Secretariat carries out its functions under the guidance of the Board of Governors. The Secretary General is the highest official of the Organization, the plenipotentiary representative of OPEC and the head of the Secretariat. He organizes and directs the work of the Organization. The structure of the OPEC secretariat includes three departments.
The OPEC Economic Commission is dedicated to promoting stability in international oil markets at fair price levels so that oil can maintain its importance as the primary global energy source in accordance with OPEC's objectives, closely monitoring changes in energy markets and keeping the Conference informed of these changes .
History of the development and activities of OPEC
OPEC's mission since the 1960s has been to present a unified position for oil-producing countries in order to limit the influence of the largest oil companies on the market. However, in reality OPEC in the period from 1960 to 1973. could not change the balance of power in the oil market. Significant adjustments to the balance of power were made by the war that suddenly began in October 1973 between Egypt and Syria, on the one hand, and Israel, on the other. With the support of the United States, Israel managed to quickly regain the lost territories and already in November sign ceasefire agreements with Syria and Egypt.
October 17, 1973 OPEC opposed US policy by imposing an embargo on oil supplies to this country and increasing selling prices for the United States' Western European allies by 70%. Overnight, a barrel of oil rose in price from $3 to $5.11. (In January 1974, OPEC raised the price per barrel to $11.65). The embargo was introduced at a time when about 85% of American citizens were already accustomed to driving their own car to work. Although President Nixon introduced strict restrictive measures on the use of energy resources, the situation could not be saved, and a period of economic recession began for Western countries. At the peak of the crisis, the price of a gallon of gasoline in the United States rose from 30 cents to $1.2.
Wall Street's reaction was immediate. Naturally, in the wake of super profits, shares of oil producing companies went up, but all other shares in the period from October 17 to the end of November 1973 lost an average of 15%. During this time, the Dow Jones index fell from 962 to 822 points. In March 1974, the embargo against the United States was lifted, but the effect it had had could not be smoothed out. In the two years from January 11, 1973 to December 6, 1974, the Dow fell nearly 45%, from 1,051 to 577.
Oil revenues for major Arab oil-producing countries, 1973-1978. grew at an unprecedented pace. For example, the income of Saudi Arabia increased from $4.35 billion to $36 billion, Kuwait - from $1.7 billion to $9.2 billion, Iraq - from $1.8 billion to $23.6 billion.
In the wake of high oil revenues, OPEC created the OPEC Fund for International Development in 1976, a multilateral development financial institution. Its headquarters are also located in Vienna. The Fund is designed to promote cooperation between OPEC member states and other developing countries. International institutions whose activities benefit developing countries and all non-OPEC developing countries can benefit from the fund. The OPEC Fund provides loans (on preferential terms) of three types: for projects, programs and balance of payments support. Resources consist of voluntary contributions from member states and profits generated through the fund's investment and lending operations.
However, by the end of the 70s, oil consumption began to decline for a variety of reasons. Firstly, the activity of non-OPEC countries has increased in the oil market. Secondly, a general decline in the economies of Western countries began to appear. Third, efforts to reduce energy consumption have borne some fruit. In addition, the United States, concerned about possible upheavals in oil-producing countries and the high activity of the USSR in the region, especially after the introduction of Soviet troops into Afghanistan, was ready to use military force if the situation with oil supplies recurred. Eventually, oil prices began to decline.
Despite all the measures taken, the second oil crisis broke out in 1978. The main reasons were the revolution in Iran and the political resonance that the Camp David agreements caused between Israel and Egypt. By 1981, the price of oil reached $40 per barrel.
OPEC's weakness was fully revealed in the early 1980s, when, as a result of the full-scale development of new oil fields outside OPEC countries, widespread adoption of energy-saving technologies and economic stagnation, demand for imported oil in industrialized countries fell sharply and prices fell by almost half. After this, the oil market experienced calm and a gradual decline in oil prices for 5 years. However, when in December 1985 OPEC sharply increased oil production to 18 million barrels per day, a real price war began, provoked by Saudi Arabia. Its result was that within a few months, crude oil fell in price by more than half - from 27 to 12 dollars per barrel.
The fourth oil crisis occurred in 1990. On August 2, Iraq attacked Kuwait, prices jumped from $19 per barrel in July to $36 in October. However, then oil prices fell to its previous level even before the start of Operation Desert Storm, which ended with the military defeat of Iraq and the economic blockade of the country. Despite persistent oil overproduction in most OPEC countries and increased competition from other oil-producing countries, oil prices remained relatively stable throughout the 1990s compared to the fluctuations they experienced in the 1980s.
However, at the end of 1997, oil prices began to fall, and in 1998, the world oil market was gripped by an unprecedented crisis. Analysts and experts cite many different reasons for this sharp drop in oil prices. Many are inclined to place all the blame on OPEC's decision, made at the end of November 1997 in Jakarta (Indonesia), to increase the ceiling on oil production, as a result of which additional volumes of oil were allegedly released onto the markets and a decrease in prices occurred. The efforts made by OPEC and non-OPEC countries in 1998 undoubtedly played a critical role in preventing a further collapse of the global oil market. Without the measures taken, the price of oil, according to some experts, could have fallen to 6-7 dollars per barrel.
Development problems of OPEC countries
One of the main disadvantages of OPEC is that it brings together countries whose interests are often opposing. Saudi Arabia and other countries on the Arabian Peninsula are sparsely populated but have vast oil reserves, large foreign investments and very close relationships with Western oil companies.
Other OPEC countries, such as Nigeria, have high populations and poverty, have expensive economic development programs, and are heavily indebted.
The second seemingly simple problem is the banal “where to put the money.” After all, it is not always easy to properly manage the shower of petrodollars pouring into the country. The monarchs and rulers of the countries upon which wealth fell, sought to use it “for the glory of their own people” and therefore started various “construction projects of the century” and other similar projects that cannot be called a reasonable investment of capital. Only later, when the euphoria from the first happiness had passed, when the ardor had cooled a little due to falling oil prices and declining government revenues, did the state budget begin to be spent more wisely and competently.
The third, main problem is to compensate for the technological backwardness of the OPEC countries from the leading countries of the world. After all, by the time the organization was created, some of the countries that were part of it had not yet gotten rid of the remnants of the feudal system! The solution to this problem could be accelerated industrialization and urbanization. The introduction of new technologies into production and, accordingly, people’s lives did not pass without leaving a mark on the people. The main stages of industrialization were the nationalization of some foreign companies, for example ARAMCO in Saudi Arabia, and the active attraction of private capital into industry. This was carried out through comprehensive government assistance to the private sector of the economy. For example, in Arabia, 6 special banks and funds were created that provided assistance to entrepreneurs under state guarantees.
The fourth problem is the insufficient qualifications of national personnel. The fact is that workers in the state were unprepared for the introduction of new technologies and were unable to maintain modern machines and equipment that were supplied to oil production and processing enterprises, as well as other factories and enterprises. The solution to this problem was to attract foreign specialists. It wasn't as easy as it seems. Because this soon gave rise to a lot of contradictions, which intensified with the development of society.
Thus, all eleven countries are deeply dependent on the income of their oil industry. Perhaps the only exception among OPEC countries is Indonesia, which receives significant revenues from tourism, timber, gas and other raw materials. For the remaining OPEC countries, the level of dependence on oil exports ranges from a low of 48% in the case of the United Arab Emirates to 97% in Nigeria.