Organization of Petroleum Exporting Countries (OPEC)

Organization of Petroleum Exporting Countries

The Organization of Petroleum Exporting Countries (OPEC) is an influential international organization founded on September 14, 1960, in Baghdad, Iraq. It was established to coordinate and unify petroleum policies among member countries to secure stable oil prices and steady supply to oil-consuming nations.

  • The founding members of OPEC were Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. These five countries possessed substantial oil reserves and aimed to gain more control over the oil market and pricing.
  • As of 2021, OPEC has 13 member countries, including Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, and Venezuela.
  • OPEC’s headquarters were initially in Geneva, Switzerland, but were relocated to Vienna, Austria, in 1965.
  • OPEC was crucial in the 1973 oil crisis, also known as the first “oil shock.” The organization’s Arab members imposed an oil embargo on the United States and other Western countries in response to their support for Israel during the Yom Kippur War. This led to a sharp increase in oil prices and widespread economic turmoil.
  • The organization’s influence on global oil prices led to the term “OPEC price” being used as a reference for crude oil prices in the global market.
  • OPEC member countries control approximately 80% of the world’s proven oil reserves, accounting for around 44% of global oil production.
  • OPEC decisions and policies often significantly affect global politics and economies, as the price and availability of oil can have wide-ranging implications.
  • In 2016, OPEC and non-OPEC oil-producing countries (led by Russia) agreed to cut oil production to stabilize prices. This marked the first agreement of its kind since 2001.
  • OPEC’s influence on pop culture can be seen in various movies, TV shows, and books that address or mention the organization and its impact on global politics and the economy.
  • OPEC has faced criticism for its perceived monopolistic practices and manipulation of oil prices. Some argue that the organization’s policies have led to economic and environmental issues.

OPEC has significantly shaped global energy policies and the oil market for over six decades. As a powerful organization composed of major oil-producing nations, OPEC’s actions and decisions continue to have a considerable impact on the global economy, international relations, and popular culture.