Opec

The contents of this presentation include;
OPEC
HEADQUARTERS, FLAG, AND CURRENT
SECRETARY
ESTABLISHMENT
WHY OPEC WAS ESTABLISHED
MEMBERSHIPS
SAUDI ARABIA
NIGERIA
VENEZUELA
MISSION
HISTORY
1973 OIL EMBARGO
ROLE OF OPEC
INFLUENCE OF OPEC ON GLOBAL OIL MARKET

1. OPEC ( Organization Of The Petroleum Exporting Countries)

2. CONTENT; OPEC HEADQUARTERS,FLAG AND CURRENT SECRETARY ESTABLISHMENT WHY OPEC WAS ESTABLISHED MEMBERSHIPS SAUDI ARABIA NIGERIA VENEZUELA MISSION HISTORY 1973 OIL EMBARGO ROLE OF OPEC INFLUENCE OF OPEC ON GLOBAL OIL MARKET

3. OPEC : OPEC , in full  Organization of the Petroleum Exporting Countries , multinational organization that was established to coordinate the petroleum policies of its members and to provide member states with technical and economic aid. It is a permanent, intergovernmental Organization , created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.  OPEC decisions have come to play a prominent role in the global oil market and international relations.

4. Cont.. OPEC spare capacity "provides an indicator of the world oil market's ability to respond to potential crises that reduce oil supplies .  Aim to regulate the amount of oil that member nations produce and to keep prices at a steady rate .

5. HEADQUARTERS, FLAG, AND CURRENT SECRETARY; OPEC’s headquarters, first located in Geneva, was moved to Vienna in 1965. Austria Abdullah Salem el- Badri , the Secretary General of OPEC since 2007-2016 Mohammad Barkindo is the current Secretary General

6. ESTABLISHMENT; In 1949, Venezuela and Iran took the earliest steps in the direction of OPEC, by inviting Iraq, Kuwait and Saudi Arabia to improve communication among petroleum- exporting nations as the world recovered from World War II . The US was simultaneously the world's largest producer and consumer of oil; and the world market was dominated by a group of multinational companies known as the "Seven Sisters", five of which were headquartered in the US . Oil- exporting countries were eventually motivated to form OPEC as a counterweight to this concentration of political and economic power.

7. WHY OPEC WAS ESTABLISHED? The creation of OPEC was in1960, in response to the control exerted by multinational companies on the oil business at the expense of producing countries. By mid 20th century oil prices, production volumes and other key aspects were controlled by seven large international companies known as the “Seven Sisters ”, according to their interests and the political and military situation of these companies’ countries of origin. Another reason that led to the creation of OPEC was a great vacuum in the world’s oil market management, the inability of the Seven Sisters.

8. MEMBERSHIPS ; The five Founding Members were later joined by: Qatar (1961) – terminated its membership in January 2019. Indonesia (1962) – suspended its membership in January 2009, reactivated it in January 2016, but decided to suspend it again in November 2016. Libya ( 1962) United Arab Emirates (1967) Algeria (1969 )

9. Cont… Nigeria ( 1971) Ecuador (1973) – suspended its membership in December 1992, reactivated it in October 2007 , but decided to withdraw its membership effective 1 January 2020 Angola (2007 ) Gabon (1975) - terminated its membership in January 1995 but rejoined in July 2016 Equatorial Guinea ( 2017) Congo (2018)

10. The current OPEC members are the following :   Algeria , Angola,  Equatorial Guinea , Gabon, Iran,  Iraq , Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia (the De facto leader), the United Arab Emirates and   Venezuela Former OPEC members are; Ecuador ,  Indonesia and   Qatar

11. LARGEST OIL PRODUCING COUNTRIES: Saudi Arabia; Saudi Arabia is the largest oil exporter in the world and largest oil producer of the OPEC nations. It has the greatest spare capacity at about 1.5 million barrels per day to 2 million barrels per day .

12. Cont.. Saudi Aramco, (formerly Arabian-American Oil Company) is the Saudi Arabian national oil company. World’s largest company in 2010. With total assets at about US$30 trillion. It has both the world's largest proven crude oil reserves, at more than 260 billion barrels and

13. Venezuela In November 2013 Venezuela produced 2.69 million barrels per day . In 2014 the production fell to 2.47 million barrels per day. In 2014 96 per cent of Venezuela's dollar earnings came from its oil exports . Nigeria;    Nigeria is the largest producer of sweet oil in OPEC Largest exporter of crude oil in Africa.

14. OPEC’s influenced on the market because its member countries hold the vast majority of crude oil reserves (about 80%) and nearly half of natural gas reserves in the world.

15. MISSION; The stated mission of the organization is to; C oordinate and unify the petroleum policies of its member countries E nsure the stabilization of oil markets, in order to secure an efficient, economic and regular  supply  of petroleum to consumers A steady income to producers fair return on capital for those investing in the petroleum industry

16. HISTORY; ( 1960) OPEC managed to prevent price reductions, but its success encouraged increases in production, resulting in a gradual decline in nominal prices.  It adopted a ‘Declaratory Statement of Petroleum Policy in Member Countries’ in 1968 . (1970) Complete sovereignty over petroleum resources. Oil prices rose steeply. In 1976, OPEC Fund for International Development  

17. 1973 OIL EMBARGO   Rise in oil prices from $3 per barrel to $12 . Gas rationing. The Oil Embargo of 1973 had a lasting effect on the United States. Recommended citizens to reduce their speed for the sake of conservation, and later. Daylight saving time . Fuel efficient cars were manufactured   Global economic recession. summer time  (United Kingdom, European Union, and others), is the practice of advancing clocks during warmer months so that darkness falls later each day according to the clock.

18. 1980; Prices began to weaken; dropped to $10 per barrel. Iran-Iraq war. Saudi Arabia stopped defending the price of oil, instead concentrated on defending its market share. Persian-Gulf war, Iraq invades Kuwait. No stabilization on prices and disruption in international market began to rise. 

19. 1990; Members reunited. Oil prices began to increase. Greater regionalism, globalization, the communications revolution and other high-tech trends . ( 2000) Oil was used increasingly as an asset class. Prices soared till 2008. International efforts to reduce the burning of fossil fuels, sustainable development; a long-term strategy in 2005.

20. WHO CONTROLS OPEC ?   The member states control the OPEC. Saudi Arabia’s crude oil reserves and production capacity dwarf the other members, it has significant influence over OPEC policy. OPEC members have a strong incentive to keep oil prices as high as possible, while maintaining their shares of the global market . OPEC controls only about 30% of the worlds production, so their ability to set oil prices by limiting their output has been lost since other countries outside of OPEC can raise production .

21. ROLE OF OPEC; OPEC is essentially a cartel of major oil producing nations. They deliberate on prices to sell their crude oil depending on the quality, capacity of each member-nation's production and of course, the market. The US gets most of their oil from these folks. There are also intra-politics happening within the nations in the organization.

22. CONT.. Production capacity dictates the level of influence within the organization . Most of the time the Middle East controls decisions but the smaller nations still benefit in some manner.

23. INFLUENCE OF OPEC ON THE GLOBAL PRICE OF OIL; In the short term; the Organization of Petroleum-Exporting Countries (OPEC) has significant influence on the price of oil . In the long term ; its ability to influence the price of oil is quite limited, primarily because individual countries have different incentives than OPEC as a whole.

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