Opec And The Price Of Oil - 873 Words

OPEC and the price of oil The organization of the petroleum exporting countries or OPEC was created at Baghdad Conference in Iraq in September 1960. The founding members of organization were Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. These five states were later joined by nine other countries: Qatar (1961), Indonesia (1962), Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975), and Angola (2007). Ecuador and Gabon withdrew from the organization in 1992 and 1994 as Indonesia in 2007 respectively. OPEC relocated its headquarters from Geneva to Vienna in 1960. The purpose of OPEC, as with any cartel, is to limit supplies in the hope of keeping the price high. The oil industry has been plagued by production booms and falling prices ever since Colonel Drakes’ discovery of oil at Titusville, Pennsylvania in 1859. Just as major oil companies colluded from the 1920’s to the 1960’s to present prices and profits from falling, members of OPEC meet at a regular basis to set production levels in the hop of maintaining prices. The essential nature of oil (no substitutes) coupled with its limited number of suppliers make it the ideal product monopoly. â€Å"When OPEC was formed in 1960, its main goal was to prevent its compromise the world’s largest oil producers, refiners, and marketers—from lowering the price of oil, which they had always specified, or reported. OPEC members sought to gain greater control over oil prices byShow MoreRelatedOpec1276 Words   |  6 PagesDefinition 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 itsRead MoreHas OPEC been a Successful Cartel?1497 Words   |  6 Pagescartel in existence today is OPEC, Organisation of Petroleum Exporting Countries. Its members are some (but not all) of the most important oil producing countries including Saudi Arabia and Mexico. Most cartels try to raise prices at the expense of consumers. The aim of this essay is to determine whether OPEC has been a successful cartel, this will mean I have to examine the strengths and weaknesses of OPEC which have been present throughout their existence of supplying oil. This should allow me toRead MoreOpec And The Oil Field1670 Words   |  7 Pagesunderstanding OPEC and the oil field, it is important to understand how they both began and what is currently occurring in the oil market. The production of oil has been around since the mid 1800’s here in the United States. In the late 1850’s, the first drilling rig made specifically for oil drilling was created by George Bissel and Edwin L. Drake. It was named the Drake well. Keep in mind that although this was the first oil drilling rig made, this is not the first time that someone had hit oil whileRead MoreEssay on Understanding OPEC: An Economic Analysis1353 Words   |  6 PagesUnderstanding OPEC: An Economic Analysis In the last few months, much has been said of Iraq’s invasion of Kuwait in 1990. Interestingly enough, one of Iraq’s motivating factors was economics. Kuwait provided Iraq with a pretext for war as it violated the economic policies of the Organization of Oil-Exporting Countries by exporting oil above its quotas. This is but one chapter in the complicated history of OPEC. OPEC is an international assembly of nations which co-ordinates and unifies the petroleumRead MoreOpec Is An International Organization1182 Words   |  5 PagesOPEC is an international organization that formed in September of 1960. OPEC headquarters reside in Vienna, Austria, however they are a collective representation of 13 different oil-exporting nations. Over its lifetime, it has conjured many different interpretations of its effect in the oil world. Some views determine that OPEC does not have a significant effect on oil prices or market dynamics but instead the worldwide competitive market. Another view concludes that OPEC uses their power toRead MorePetroleum As Vital For Human Existence As Water1410 Words   |  6 PagesBuchan a Financial Times correspondent stated, â€Å"A century ago, petroleum - what we call oil - was just an obscure commodity; today it is almost as vital to human existence as water.† The uses petroleum have are relevant from transportation to everyday synthetic materials. It is the sole reasoning behind a unceasing thirst for oil around the world, where the only way to survive in the modern age is with the aid of oil. This brings us to the importance in understanding the petroleum industry because itRead MoreEssay about OPEC Presentation1377 Words   |  6 PagesOverview of OPEC Is a permanent, intergovernmental Organization, created at the Baghdad Conference on September, 1960. Founder Members: Later joined Members †¢Iran †¢Iraq †¢Kuwait †¢Saudi Arabia †¢Venezuela †¢Qatar (1961) †¢Indonesia (1962) – suspended membership 01/2009 †¢Libya (1962) †¢United Arab Emirates (1967) †¢Algeria (1969) †¢Nigeria (1971) †¢Ecuador (1973) – suspended membership 1992-2007 †¢Angola (2007) †¢Gabon (1975–1994) Objectives of Opec †¢ OPECs objective is to co-ordinate and unify petroleumRead MoreThe Organization Of The Petroleum Exporting Countries1029 Words   |  5 PagesIn December 2014, OPEC was ranked third on Lloyd s list of the top 100 most influential people in the shipping industry.† It is important to understand the mission of OPEC is to better understand its influence and impacts on the world. According to the OPEC website, The mission statement of OPEC is as follows: In accordance with its Statute, the mission of the Organization of the Petroleum Exporting Countries (OPEC) is to coordinate and unify the petroleum policies of its Member Countries andRead MoreOil And Demand For Oil1174 Words   |  5 PagesCrude oil is one of the most economically mature commodity markets in the world. Even though most crude oil is produced by a relatively small number of companies, and often in remote locations that are very far from the point of consumption but it is shipped all over the world. The glo bal supply and demand determines prices for oil. Events around the world can affect the prices at our home for oil-based energy. OPEC, the large oil-producing cartel, does have the ability to influence world prices, butRead MoreEffects Of The Seven Sisters Actions Outlined1289 Words   |  6 Pagesgovernments 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 discussed its hard to formally prove that structural change has taken place in a quantative way. The oil shocks of 1973