OPEC - Organization of Petroleum Exporting Countries
OPEC, otherwise known as the Organization of Petroleum Exporting Countries was created in the year 1960 by five founding members consisting of Saudi Arabia, Iran, Iraq, Kuwait and Venezuela. Initially the organization started with just five members and the number increased to twelve. At present, the twelve member nations include Algeria, Ecuador, Angola, Iran, Iraq, Nigeria, Kuwait, Libya, Saudi Arabia, Qatar, United Arab Emirates and Venezuela. Crude oil is an unavoidable fossil fuel in today's world and it is in great demand .The crude oil prices keep fluctuating and the oil market is highly influenced by OPEC. This International organization determines the production and price of crude oil.
The OPEC member countries hold most of the world's major oil reserves and OPEC sets the production quote for these member nations.
Apart from ensuring stabilization of oil prices in the International oil market, this intergovernmental organization thrives to accomplish its various goals,
which include safeguarding the interests of its member nations, coordinating and unifying the petroleum policies among the member nations.
The Organization of the Petroleum Exporting Countries or OPEC also ensures regular supply of oil to the consuming countries.
Another important goal is to ensure that the oil producers get regular income and the investors receive a fair return on the investment made by them.
The Organization of the Petroleum Exporting Countries or OPEC has a huge role to play in the International oil market and it has to accomplish the various set goals, which are a challenge on a regular basis. Thus OPEC takes active participation in improving the global economy and to supply oil to the consumers at a reasonable price. Having started as a small organization OPEC has become successful after overcoming lot of obstacles. Various member nations have demanded the price of oil to be increased so that they can earn huge revenue. Reduction in production quota means low production cost with the implementation of modern technology and selling oil at a higher price.
Crude oil is highly in demand throughout the world due to its varied uses. Demand for crude oil is driven by the developing countries recently. The transportation sector has increased its petroleum consumption as new vehicles are introduced and the number of vehicle users has increased. Even though the OPEC member nations are trying their best to increase the crude oil price Saudi Arabia believes that if the oil price increases or of supply is not stable then the developed countries will not opt for crude oil as the first choice, rather they would look for an alternative which is quite affordable and efficient.
In September 2008, the OPEC cartel members voted unanimously to reduce the production quota but Saudi Arabia was against it as this nation was focused on meeting the demand for crude oil in the market so that the customers do not face shortfall in oil supply. Thus OPEC's decision on production quota and prices affects the global economy as well as the oil supply to the consumers.