What is OPEC
OPEC is the abbreviation for the Organisation of Petroleum Exporting Countries. The organisation was formed in the year 1960, with an intention of regulating the oil prices all over the world, so that fluctuations of any kind are not caused. This organisation plays a key role in controlling the prices of oil all over the world as the members of the OPEC have a large share in the oil production of the world. It would be worth mentioning here, that the member nations of the OPEC contribute 40 percent of the entire world’s oil production and 15 percent of the total natural gas produced. Thus, it would not be an exaggeration in saying that oil prices all over the globe are greatly influenced by the policies of OPEC.
OPEC was formed in the September 1960 in Baghdad and the initial members of the organization were Saudi Arabia, Venezuela, Iraq, Kuwait and Iran. In the year 1962, OPEC was formally registered with United Nations Secretariat. Many countries like Libya, Ecuador, Gabon, Indonesia etc joined the organization in the following years. However, some countries have opted out of OPEC owing to their internal policies. The intergovernmental alliance, OPEC that was formed with an intention of strengthening the economies of the oil producing countries has been greatly successful in this regard. The headquarters of OPEC is in Vienna, Austria.
Currently, there are twelve member nations in OPEC. The members meet twice a year in the months of March and September. It is in these meetings that the policies for the current year are formulated and passed. However, it is to be noted that in situations where the global prices of oil and related commodities fluctuate due to wars or sanctions, meetings can be called to discuss the matter and take step towards reducing the impact of the fluctuating global scenario on the oil prices. Thus, the role played by OPEC in maintaining the stability in the crude oil and natural gas market is of utmost importance.
The present President of OPEC is Rostam Ghasmi and the Secretary General is Abdallah el- Badri. The 12 member nations of OPEC are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. There have been instances from the history when the decisions taken by OPEC have led to the skyrocketing of the oil prices as in the year 1973, when OPEC refused to provide oil to the western countries in retaliation against their support to Israel’s attack on Egypt and Syria.