OPEC

I was reading on OPEC the other day and found it interesting. For all thee knowledge lovers, here I go...

OPEC stands for 'Organization of Petroleum Exporting Countries'. It's member countries are namely Algeria, Angola, Ecuador, Indonesia, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Venezuela was the first OPEC member. The OPEC, formed in 1949, was mainly formed to help maintain steady economic  growth of producing countries via control of oil prices and production, avoid unnecessary fluctuations in oil prices, to provide sufficient supply of petroleum to consuming countries and to provide capital returns to those investing in the petroleum industries.

OPEC controls about two-thirds of the worlds oil reserves and roughly 36% of the world's oil production (as of March,2008). With this high percentage of world's oil supply coming from OPEC it is believed that the price of petroleum is highly controlled by OPEC. However, off late, it is believed that OPEC's control on petroleum prices has reduced than before thanks to Russia which has emerged as a major oil producer. A recent article I read here says Russia to be the highest producer of oil in the world. Also, new findings of oil reserves in the Gulf of Mexico and the North Sea have led to less price control in the hands of OPEC.

OPEC usually receives its income in US-dollars. Hence changes in the value of the dollar affects OPEC's decision on how much oil to produce. e.g. if the value of the US-Dollar reduces, OPEC countries received less in terms of other currencies in terms of purchasing power.

OPEC Quotas and Production in thousands of barrels per day

(Reproduced from http://en.wikipedia.org/wiki/OPEC )

If you would like to know more on OPEC then click here.

 

The above article has been reproduced from http://www.wikipedia.org and has been modified for conciseness.