Organization of Petroleum Exporting Countries Any country with substantial exports and same petroleum interests are eligible to join

1. OPEC
ORGANIZATION OF
PETROLEUM EXPORTING
COUNTRIES
PRESENTED BY:
ANKIT BAJORIA(1822)

2. ABOUT OPEC
 Headquarters - Vienna, Austria
 Official languages – English
 Member states – 12 member countries
 Leaders –
- President Rostam
Ghasemi
-Secretary General Abdallah el-Badri

3. ABOUT OPEC
 Establishment - Baghdad, Iraq
- Statute September 10–14, 1960
in effect January 1961
 Currency - Indexed as USD-per-barrel

4. BRIEF HISTORY ON OPEC
 1960’s Five Founding Members seek to assert
rights in oil market dominated by Seven
Sisters, Secretariat moved from Geneva to
Vienna 1965
 1970’s OPEC rose to international prominence
during this decade, as its Member Countries
took control of their domestic petroleum
industries and acquired a major say in the
pricing of crude oil on world markets. On two
occasions, oil prices rose steeply in a volatile
market, triggered by the Arab oil embargo in
1973 and the outbreak of the Iranian
Revolution in 1979

5. HISTORY
 The 1980s After reaching record levels early in the
decade, prices began to weaken, before crashing in
1986, responding to a big oil glut and consumer shift
away from this hydrocarbon. OPEC’s share of the
smaller oil market fell heavily and its total petroleum
revenue dropped below a third of earlier
peaks, causing severe economic hardship for many
Member Countries.
 The 1990s Prices moved less dramatically than in the
1970s and 1980s, and timely OPEC action reduced
the market impact of Middle East hostilities in 1990–
91. But excessive volatility and general price
weakness dominated the decade, and the South-East
Asian economic downturn and mild Northern
Hemisphere winter of 1998–99 saw prices back at
1986 levels

6. HISTORY
 The 2000s An innovative OPEC oil price band
mechanism helped strengthen and stabilise crude
prices in the early years of the decade. But a
combination of market forces, speculation and
other factors transformed the situation in
2004, pushing up prices and increasing volatility in
a well-supplied crude market. Oil was used
increasingly as an asset class. Prices soared to
record levels in mid-2008, before collapsing in the
emerging global financial turmoil and economic
recession. OPEC became prominent in supporting
the oil sector, as part of global efforts to address
the economic crisis.

7. OPEC Member Countries
 Founding Members: Saudi Arabia, Iran,
Kuwait, Iraq, and Venezuela
 Full Members: Qatar, Libya, Indonesia, United
Arab Emirates, Algeria, and Nigeria
 Founding Members have veto power over
admission of new members (otherwise all
countries have equal rights)
 Any country with substantial exports and same
petroleum interests are eligible to join

8. OPEC’s Principle Objectives
 Coordinate and unify oil policies of Member
Countries
 Determine best means of safeguarding
individual and collective interests
 Stabilize prices in international oil markets
 Provide efficient and economic supply of
petroleum to consuming nations
 Obtain a fair return on capital to those
investing in oil industry

9. How OPEC Functions
 The OPEC Conference: supreme authority,
meets generally in March and September
 Heads of Delegation: official representatives
of each Member Country
 Board of Governors: directs management,
draws up budget
 Secretariat: carries out executive functions,
consists of Secretary General and Research
Division

10. OPEC and the Oil Market
 OPEC does not control the oil market, but it
does have a strong influence on the market
 OPEC Member Countries produce 41percent
of the world’s crude oil

11. SOME FACTS
 Indonesia withdrew in 2008 after it became a net
importer of oil, but stated it would likely return if it
became a net exporter again
 encompasses OPEC actions both before and after
the outbreak of hostilities in October 1973, and
concludes that “OPEC countries were only
'staying even' by dramatically raising the dollar
price of oil.” OPEC's ability to control the price of
oil has diminished somewhat since then, due to
the subsequent discovery and development of
large oil reserves in Alaska, the North Sea,
Canada, the Gulf of Mexico, the opening up of
Russia, and market modernization

12. SOME FACTS
 As of November 2010, OPEC members
collectively hold 79% of world crude oil
reserves and 44% of the world’s crude oil
production, affording them considerable
control over the global market

13. THANK YOU