Organization of Petroleum Exporting

Countries OPEC

History and Evolution

The Organization of the Petroleum Exporting Countries (OPEC) is a permanent,

intergovernmental Organization, created at the Baghdad Conference on September 10
14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The five Founding
Members were later joined by nine other Members: Qatar (1961); Indonesia (1962)
suspended its membership from January 2009; Libya (1962); United Arab Emirates
(1967); Algeria (1969); Nigeria (1971); Ecuador (1973) suspended its membership
from December 1992-October 2007; Angola (2007) and Gabon (19751994).

OPEC had its headquarters in Geneva, Switzerland, in the first five years of its existence.
This was moved to Vienna, Austria, on September 1, 1965.

OPEC's objective is to co-ordinate and unify petroleum policies among Member

Countries, in order to secure fair and stable prices for petroleum producers; an efficient,
economic and regular supply of petroleum to consuming nations; and a fair return on
capital to those investing in the industry.

An organization consisting of the world's major oil-exporting nations. The Organization

of Petroleum Exporting Countries (OPEC) was founded in 1960 to coordinate the
petroleum policies of its members, and to provide member states with technical and
economic aid.
OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil
on the world market, in order to avoid fluctuations that might affect the economies of
both producing and purchasing countries.
OPEC membership is open to any country that is a substantial exporter of oil and that
shares the ideals of the organization. As of 2011, OPEC had 12 member countries,
including founder members Iran, Iraq, Kuwait and Venezuela.
OPEC's influence on the market has been widely critcized. Because its member countries
hold the vast majority of crude oil reserves (about 80%) and nearly half of natural gas
reserves in the world, the organization has considerable power in these markets.

The 1960s

OPECs formation by five oil-producing developing countries in Baghdad in September

1960 occurred at a time of transition in the international economic and political
landscape, with extensive decolonisation and the birth of many new independent states in
the developing world.

The international oil market was dominated by the Seven Sisters multinational
companies and was largely separate from that of the former Soviet Union (FSU) and
other centrally planned economies (CPEs).

OPEC developed its collective vision, set up its objectives and established its Secretariat,
first in Geneva and then, in 1965, in Vienna. It adopted a Declaratory Statement of
Petroleum Policy in Member Countries in 1968, which emphasised the inalienable right
of all countries to exercise permanent sovereignty over their natural resources in the
interest of their national development. Membership grew to ten by 1969.

Sustainability

Almost 81% of the world's proven oil reserves are located in OPEC Member Countries,
with the bulk of OPEC oil reserves in the Middle East, amounting to 66% of the OPEC
total.

In 2009, Mikael Hk, argued that despite technological advances that increase the
productivity of oil wells, the rate of decline of oil fields would eventually increase as time
continues.

In 2010, energy policy expert Joyce Dargay accused OPEC, along with several other
institutions, of drastically underpredicting future oil demand by 2030 by more than 25%,

a difference of 28 million barrels per day (4,500,000 m3/d) or about twice the current
amount supplied by Saudi Arabia

Publications and research

Since 2007, OPEC publishes the World Oil Outlook (WOO) annually, in which it presents a
comprehensive analysis of the global oil industry including OPEC projections for the mediumterm and long-term for oil demand and supply.