OPEC COUNTRIES: A GROUP OF CRUDE OIL COUNTRIES

OPEC

The Organization of Petroleum Exporting Countries is an organization of 14 oil producing countries. This is 54% of the total world exports of 46 mbd (thousand barrels (of oil) per day). OPEC's members hold 82% of the world's proven oil reserves. OPEC's decisions have a significant impact on future oil prices.

The oil and energy ministers of each member countries meet with the OPEC members at least twice a year to coordinate their oil production policies. Each member country follows a fixed system, in which everyone agrees to produce a certain amount of oil.

Each country is also responsible for reporting its own production. If a country produces too much oil from its quota, it is excluded from OPEC.

 

Despite its power, OPEC cannot fully control the price of oil. Oil prices are also determined by the oil futures market. Most of the price of oil is also determined by the commodities traders. This is why oil prices are so high.

 

In 1960, five OPEC countries aligned to regulate the supply and price of oil. These countries felt that they have nonrenewable resources. If they compete with each other, then the price of oil will increase greatly and nonrenewable resources may also come to an end.

OPEC then held its first meeting on 10–14 September 1960 in Baghdad, Iraq. The five founding members were Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. OPEC registered itself with the United Nations on 6 November 1962.

OPEC has 13 active members. Saudi Arabia is by far the largest producer, contributing about one-third of total OPEC oil production. It is the only member that materially impacts the world's supply. For this reason, it has more authority and influence than other countries.

OPEC has 13 member countries: 5 in the Middle East (Western Asia), 7 in Africa and 1 in South America. The Organization of the Petroleum Exporting Countries (OPEC) was established in Baghdad, Iraq, in which an agreement was signed in September 1960 by the Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela by 5 countries. Currently, the organization has a total of 14 member countries.

 

 

The importance of OPEC organization

Without OPEC, individual oil-exporting countries will do as much OIL production as possible to maximize national revenue, by competing with each other, they will reduce oil prices even further, encouraging even more global demand. In this way, OPEC countries will produce their most precious resource quickly and take it to an end. Therefore, it is agreed to produce only enough to keep the price high for all members of OPEC.

 

 

3 Goles OPEC 

The first goal of OPEC is to keep prices stable. It wants to ensure that its member countries get a fair price for their oil.

What is the correct price?

OPEC has traditionally stated that it ranges between $70 and $80 per barrel. At these prices, OPEC countries have enough oil for the last 113 years. If prices fall below this, OPEC members will agree to restrict supply to push prices higher.

 

The second goal of OPEC is to reduce oil price volatility.

 

OPEC's third goal is to adjust the world's oil supply in response to deficiencies.

Opec headquarters

OPEC's headquarters was in Geneva, Switzerland for the first five years of its existence. It was moved to Vienna, Austria on 1 September 1965 in Europe.

 

 

OPEC+ members

In addition to OPEC members, 10 additional oil exporting countries led by Russia have been classified as OPEC + since the year 2016 as they agree to fix production quotas and cooperate in fixing global crude oil prices, so that global production Below the global demand, except for OPEC countries, OPEC + also includes Russia, Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, South Sudan, Sudan.

 

Observers countries 

Since the 1980s, representatives from Egypt, Mexico, Norway, Oman, Russia, and other oil exporting countries have attended several Opec meetings as observers. This system acts as an informal mechanism for coordination of policies.

 

Crude oil benchmarks

The "crude oil benchmark" is a standardized petroleum product that has been a convenient reference price for buyers and sellers of crude oil since 1983, including standard contracts in major futures markets. Reference price). Oil prices (usually per dollar / barrel) because based on variety varies depending on grade, delivery date and location, and other legal requirements, therefore benchmark is used.

 

North Sea Brent Crude Oil is the leading benchmark for the Atlantic basin crude oil, and is used for about two-thirds of the world's traded crude oil. Other famous benchmarks are West Texas Intermediate (WTI)), Dubai Crude, Oman Crude and Urals oil.

 

 

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