Trusteeship countries See what "OPEC" is in other dictionaries

Definition and background: The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization currently made up of fourteen oil exporting countries that cooperate to coordinate their oil policies. The organization was formed in response to the activities and practices of seven major international oil companies known as the “Seven Sisters” (among them British Petroleum, Exxon, Mobil, Roya, Dutch Shell, Gulf Oil, Texaco and Chevron). The activities of corporations often had a detrimental effect on the growth and development of the oil-producing countries whose natural resources they exploited.

The first step towards the creation of OPEC can be traced back to 1949, when Venezuela approached four other developing oil-producing countries - Iran, Iraq, Kuwait and Saudi Arabia - with a proposal for regular and closer cooperation on energy issues. But the main stimulus for the birth of OPEC was an event that occurred ten years later. After the “seven sisters” decided to reduce the price of oil without first coordinating this action with the heads of state. In response, several oil-producing countries decided to hold a meeting in Cairo, Egypt, in 1959. Iran and Venezuela were invited as observers. The meeting adopted a resolution requiring corporations to consult in advance with the governments of oil-producing countries before changing oil prices. However, the “seven sisters” ignored the resolution, and in August 1960 they again reduced oil prices.

The Birth of OPEC

In response, five of the largest oil-producing countries held another conference on September 10–14, 1960. This time, Baghdad, the capital of Iraq, was chosen as the meeting place. The conference was attended by: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela (founding members of OPEC). This is when OPEC was born.

Each country sent delegates: Fouad Rouhani from Iran, Dr. Talaat al-Shaibani from Iraq, Ahmed Sayed Omar from Kuwait, Abdullah al-Tariqi from Saudi Arabia and Dr. Juan Pablo Perez Alfonso from Venezuela. In Baghdad, delegates discussed the role of the “seven sisters” and the hydrocarbon market situation. Oil producers desperately needed to create an organization to protect their critical natural resources. Thus, OPEC was created as a permanent intergovernmental organization with its first headquarters in Geneva, Switzerland. In April 1965, OPEC decided to move its administration to Vienna, the capital of Austria. The host agreement was signed and OPEC moved its office to Vienna on September 1, 1965. After the creation of OPEC, governments of OPEC member countries took strict control of their natural resources. And in subsequent years, OPEC began to play a more important role in the global commodity market.

Oil reserves and production levels

The extent of influence of individual OPEC members on the organization and on the oil market as a whole usually depends on the levels of reserves and production. Saudi Arabia, which controls about 17.8% of the world's proven reserves and 22% of OPEC's proven reserves. Therefore, Saudi Arabia plays a leading role in the organization. At the end of 2016, the volume of world proven oil reserves amounted to 1.492 billion barrels. oil, OPEC accounts for 1.217 billion barrels. or 81.5%.

WORLD'S PROVEN OIL RESERVES, BILLION. BARR.

Source: OPEC

Other key members are Iran, Iraq, Kuwait and the United Arab Emirates, whose combined reserves are significantly higher than Saudi Arabia's. Kuwait, with a small population, has shown a willingness to reduce production relative to the size of its reserves, while Iran and Iraq, with growing populations, tend to produce at higher levels relative to reserves. Revolutions and wars have disrupted the ability of some OPEC members to maintain stable high level production. OPEC countries account for about 33% of world oil production.

Major oil-producing countries that are not members of OPEC

USA. The United States is the leading oil-producing country in the world with production averaging 12.3 million barrels. oil per day, which is 13.4% of global production according to British Petroleum. The United States has been a net exporter, meaning exports have exceeded oil imports since early 2011.

Russia remains one of the largest oil producers in the world, averaging 11.2 million barrels in 2016. per day or 11.6% of total world production. The main regions of oil production in Russia are Western Siberia, the Urals, Krasnoyarsk, Sakhalin, the Komi Republic, Arkhangelsk, Irkutsk and Yakutia. Most of it is produced at the Priobskoye and Samotlorskoye fields in Western Siberia. The oil industry in Russia was privatized after the collapse Soviet Union, but after a few years the companies returned to state control. The largest companies involved in oil production in Russia are Rosneft, which acquired TNK-BP in 2013, Lukoil, Surgutneftegaz, Gazpromneft and Tatneft.

China. In 2016, China produced an average of 4 million barrels. oil, which amounted to 4.3% of world production. China is an oil importer, as the country consumed an average of 12.38 million barrels in 2016. per day. According to the latest EIA (Energy Information Administration) data, about 80% of China's production capacity is onshore, with the remaining 20% ​​being small offshore reserves. The northeast and north central regions of the country are responsible for the majority of domestic production. Regions such as Daqing have been exploited since the 1960s. Production from brownfields has peaked and companies are investing in technology to increase capacity.

Canada ranks sixth among the world's leading oil producers with an average production level of 4.46 million barrels. per day in 2016, representing 4.8% of global production. Currently, the main sources of oil production in Canada are the Alberta tar sands, the Western Canada Sedimentary Basin and the Atlantic Basin. The oil sector in Canada is privatized by many foreign and domestic companies.

Current OPEC members

Algeria - since 1969

Angola – 2007-present

Ecuador – 1973-1992, 2007 – present

Gabon - 1975-1995; 2016–present

Iran - from 1960 to the present

Iraq - 1960 to present

Kuwait – 1960 to present

Libya – 1962-present

Nigeria - 1971 to present

Qatar – 1961-present

Saudi Arabia - 1960 to present

United Arab Emirates - 1967 to present

Venezuela – 1960 to present

Former members:

Indonesia – 1962-2009, 2016

OPEC translated from English is the organization of oil exporting countries. The purpose of creating OPEC was and is to control oil production quotas and prices. OPEC was created in September 1960 in Baghdad. The list of members changes periodically during the existence of the organization and as of 2018 (July) it includes 14 countries.

The initiators of the creation were 5 countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) year), Angola (2007) and Equatorial Guinea (2017).

As of today (February 2018), OPEC includes 14 countries:

1. Algeria
2. Angola
3. Venezuela
4. Gabon
5. Kuwait
6. Qatar
7. Libya
8. United Arab Emirates
9. Nigeria
10. Saudi Arabia
11. Equatorial Guinea
12. Ecuador

Russia is not a member of OPEC.

Countries included in the organization control 40% of all oil production on earth, that’s 2/3. The leader in oil production in the world is Russia, but it is not part of OPEC and cannot control the price of oil. Russia is an energy-dependent country. The level depends on its sale economic development and the well-being of Russians. Therefore, in order not to depend on oil prices on the world market, Russia should develop other sectors of the economy.

So, several times a year the ministers of OPEC countries gather for meetings. They assess the state of the world oil market and predict the price. Depending on this, decisions are made to reduce or increase oil production.

Trusteeship countries

The abbreviation OPEC stands for "Association of Petroleum Exporting Countries". The main goal of the organization was to regulate prices for black gold on the world market. The need to create such an organization was obvious. In the middle of the 20th century, oil prices began to fall due to market glut. The Middle East sold the most oil. It was there that the richest deposits of black gold were discovered.

In order to pursue a policy to maintain oil prices on a global scale, it was necessary to force oil-producing countries to reduce the rate of its production. This was the only way to remove excess hydrocarbons from the world market and raise prices. OPEC was created to solve this problem.

List of countries that are members of OPEC

Today, 14 countries take part in the organization’s work. Consultations between representatives of the organization are held twice a year at OPEC headquarters in Vienna. At such meetings, decisions are made to increase or decrease oil production quotas for individual countries or the entire OPEC.

Venezuela is considered the founder of OPEC, although this country is not a leader in oil production. The palm in terms of volumes belongs to Saudi Arabia, followed by Iran and Iraq. In total, OPEC controls about half of the world's black gold exports. In almost all member countries of the organization, the oil industry is the leading industry in the economy. Therefore, the decline in world oil prices causes a strong blow to the income of OPEC members.

African countries that are part of OPEC

Of the 54 African states, only 6 are members of OPEC:

Most of the “African” OPEC participants joined the organization in the 1960-1970s. At that time, many African states were freed from colonial rule European countries and gained independence. The economy of these countries was focused mainly on the extraction of minerals and their subsequent export abroad. African countries are characterized by high populations but also high rates of poverty. To cover the costs of social programs, the governments of these countries are forced to produce a lot of crude oil. In order to withstand competition from European and American oil-producing transnational corporations, African countries joined OPEC.

Asian countries included in OPEC

Political instability in the Middle East predetermined the entry of Iran, Saudi Arabia, Kuwait, Iraq, Qatar, United Nations United Arab Emirates. The organization's Asian member countries are characterized by low population density and huge foreign investment. Oil revenues are so enormous that Iran and Iraq paid for their military expenses in the 1980s by selling oil. Moreover, these countries fought against each other.

Today, political instability in the Middle East threatens not only the region itself, but also threatens world oil prices. It's going on in Iraq and Libya Civil War. The lifting of sanctions from Iran threatens to increase oil production in this country, despite the obvious exceeding of the OPEC oil production quota.

Latin American countries that are members of OPEC

Only two Latin American countries are members of OPEC - Venezuela and Ecuador. Despite the fact that Venezuela is the country that initiated the founding of OPEC, the state itself is politically unstable. Recently (in 2017), a wave of anti-government protests swept across Venezuela due to the government’s ill-conceived economic policies. Recently, the country's public debt has increased significantly. For some time, the country kept afloat due to high oil prices. But as prices fell, the Venezuelan economy also collapsed.

Non-OPEC oil exporting countries

Recently, OPEC has lost its leverage over its members. This situation is largely due to the fact that several oil importing countries that are not members of OPEC have appeared on the world market.

First of all this:

Despite the fact that Russia is not a member of OPEC, it is a permanent observer in the organization. An increase in oil production by non-OPEC countries leads to a decrease in the price of oil on the world market. However, OPEC cannot influence them, since even members of the organization do not always comply with agreements and exceed permissible quotas.

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general information

OPEC countries meeting

Which states are included?

Oil production in Iran

• tourism;
• timber extraction;
• gas sales;
• sale of other raw materials.

Organization policy

Meeting of OPEC member countries

Attempts to resolve the situation

Falling oil prices

Price policy

Extraordinary meeting

OPEC meeting in Vienna

Finally

Countries that are part of OPEC

Last September, OPEC celebrated its anniversary. It was created in 1960. Today, OPEC countries occupy a leading position in the field of economic development.

general information

OPEC translated from English “OPEC” - “Organization of Petroleum Exporting Countries”. This international organization, created to control the volume of sales of crude oil and set the price for it.

By the time OPEC was created, there was a significant surplus of black gold in the oil market. The appearance of excess oil is explained by the rapid development of its vast deposits. The main supplier of oil was the Middle East. In the mid-50s of the twentieth century, the USSR entered the oil market. The volume of black gold production in our country has doubled.

The result of this was the emergence of serious competition in the market. Against this background, oil prices fell significantly. This contributed to the creation of OPEC. 55 years ago, this organization pursued the goal of maintaining an adequate level of oil prices.

OPEC countries meeting

Which states are included?

Today this organization includes 12 powers. These include states in the Middle East, Africa and Asia.

Russia is not a member of OPEC. Characterizing the powers that are part of this organization is not an easy matter. Only one thing can be said with confidence: just like 55 years ago, today the countries on the list are united by oil policy.

The initiator of the creation of this organization was Venezuela. Initially, the list included it, as well as the leading oil exporting states. After this, the list was replenished with Qatar and Indonesia. Libya was included in the list not during the time of Colonel Gaddafi, as many people think, but under King Idris, in 1962. The Emirates entered the list only in 1967.

In the period 1969-1973. the list was supplemented by such members as Algeria, Nigeria and Ecuador. In 1975, Gabon joined the list. In 2007, Angola joined the list. It is not known for certain whether OPEC will be added to the list in the near future.

Countries that are part of OPEC

What are countries?

The states that are part of this organization in 2018 produce only 44% of the world's oil production. But these countries have a huge influence on the black gold market. This is explained by the fact that the states that are part of this organization own 77% of all proven oil reserves throughout the world.

Saudi Arabia's economy is based on oil exports. Today, this black gold exporting state has 25% of oil reserves. Thanks to the export of black gold, the country receives 90% of its income. The GDP of this largest exporting state is 45 percent.

The second place in gold production is given to Iran. Today this state, a major oil exporter, occupies 5.5% of the world market. Kuwait should be considered an equally large exporter. The extraction of black gold brings the country 90% of its profits.

Oil production in Iran

Until 2011, Libya occupied an enviable place in oil production. Today the situation in this once richest state can be called not just difficult, but critical.

Iraq has the third largest oil reserves. The southern deposits of this country can produce up to 1.8 million black gold in just one day.

It can be concluded that most of the states that are members of OPEC are dependent on the profits that their oil industry brings. The only exception among these 12 states is Indonesia. This country also receives income from such industries as:

• tourism;
• timber extraction;
• gas sales;
• sale of other raw materials.

Indonesia as part of OPEC countries

For other powers that are part of OPEC, the percentage of dependence on the sale of black gold can range from 48 to 97 indicators.

When difficult times come, states with rich oil reserves have only one option - to diversify the economy as quickly as possible. This happens due to the development of new technologies that help save resources.

Organization policy

In addition to the goal of unifying and coordinating oil policy, the organization has an equally priority task - to stimulate economical and regular supplies of goods by members to those states that are consumers. Another important goal is to achieve a fair return on capital. This is relevant for those who actively invest in industry.

The main governing bodies of OPEC include:

The conference is the highest body of this organization. The highest position should be considered the position Secretary General.

Meetings between energy ministers and black gold specialists take place twice a year. The main purpose of the meeting is to assess the state of the international oil market. Another priority is to develop a clear plan to stabilize the situation. The third purpose of the meeting is to forecast the situation.

Meeting of OPEC member countries

The organization’s forecast can be judged by the situation on the black gold market last year. Representatives of the member countries of this organization argued that prices would be maintained at $40-50 per barrel. At the same time, representatives of these states did not rule out that prices could rise to $60. This could only happen if China’s economy grew intensively.

Judging by the latest information, the plans of the management of this organization have no desire to reduce the amount of oil products produced. Also, OPEC has no plans to interfere in the activities of international markets. According to the organization's management, it is necessary to give the international market a chance to regulate itself.

Today, oil prices are close to a critical point. But the market situation is such that prices can either rapidly fall or rise.

Attempts to resolve the situation

Falling oil prices

After the start of another economic crisis that gripped the whole world, OPEC countries decided to meet in December 2015. Before this, 12 states met in June 2015, when there was a record drop in black gold futures. Then the size of the fall was catastrophic - up to 25 percent.

Judging by the forecast given by the organization’s experts at the end of 2015, the crisis will not affect only Qatar. In 2016, the price of Brent oil was about $60 per barrel.

Price policy

Today the situation for the OPEC participants themselves is as follows:

1. Iran - the price that ensures a deficit-free state budget is $87 (the share in the organization is 8.4%).
2. Iraq - $81 (share in the organization - 13%).
3. Kuwait - $67 (share in the organization - 8.7%).
4. Saudi Arabia - $106 (share in the organization - 32%).
5. UAE - $73 (share in the organization - 9.2%).
6. Venezuela - $125 (share in the organization - 7.8%).

According to some reports, at an informal meeting held in December 2015, Venezuela made a proposal to reduce current oil production to 5 percent. This information has not yet been confirmed.

Saudi Arabian Oil Minister Ali al-Naimi

The situation within the organization itself can be called critical. A year of significantly lower prices for black gold has hit the OPEC countries hard in the pocket. According to some estimates, the total income of member states could drop to $550 billion per year. The previous five-year plan showed much more high performance. Then the annual income of these countries is 1 trillion. US dollars.

Extraordinary meeting

According to the Minister of Oil Industry of Iran, the existing problem can only be solved in the long term.

In February 2016, a decision was made to hold another meeting. The initiative was taken by six OPEC members:

The Russian Federation and Oman were also supposed to take part in the discussion. The objective of the extraordinary meeting was to conclude an agreement that would suit all participants of the 2016 meeting.

OPEC meeting in Vienna

One of the largest oil exporters, Saudi Arabia, did not hide the fact that it was not going to discuss lowering production with other OPEC members and “observers.” Iran also plans to significantly increase its production volumes. Today this state declares that its plans are to increase the volume to 500 thousand barrels/day.

On November 30, 2017, a new meeting of the member countries of the organization was held. Unfortunately, it was again impossible to accept the agreement. According to experts, the situation with oil prices in 2017 and 2018 will not stabilize.

Finally

OPEC headquarters building in Vienna

In 2018, members of the organization will adhere to the traditional course. Presumably, some restrictions are planned. But the hypothetical “sanctions” will most likely be symbolic. This is because countries will not comply with the proposed restrictions.

Trusteeship countries 2018 list

The Organization of Petroleum Exporting Countries and Non-Cartel Countries (OPEC+) has concluded that the decision to extend the deal to reduce oil production in 2018 must be left unchanged. This was reported by TASS with reference to Russian Energy Minister Alexander Novak, who on Sunday took part in a meeting of the OPEC+ monitoring committee in the Omani capital Muscat.

“The main conclusion of today’s meeting: we once again confirm the need for and commitment to the agreements that were reached on November 29–30 for the entire period of 2018,” said the head of the Russian department.

He explained the decision taken by the ministers by the fact that the market has not yet reached a balance between demand and supply of oil. Giving forecasts for the year, Novak said that Russia is optimistic about the degree to which participants will implement the OPEC+ deal, which was 107% implemented in the previous year. The minister also added that the deal is effective and brings results.

Novak pointed out that average oil prices in 2017 were 30% higher than the year before. After this fall, experts recorded an increase in investment in the industry by 6%. Also last year, according to the head of the Russian energy department, there was an increase in oil demand by 1.5 million barrels. per day - this turned out to be higher than predicted.

Before the start of the negotiations, Novak told reporters that oil prices are not the only factor in the decision of OPEC+ member countries on a possible withdrawal from the agreement to reduce production.

“The price factor is not the only factor when you need to start exiting a deal. We will look at the market situation. We don't want any individual indicators as indicators. There must be a complete recovery of the market,” he answered the corresponding question.

OPEC decisions on oil prices are one of the most important factors in fundamental analysis. The dynamics of trading in this product depend on them.

Today you will learn what OPEC is and how OPEC oil exporting countries influence the production of raw materials, what kind of organization it is, how it regulates quotas for obtaining black gold from the bowels of the earth, what kind of relations it has with Russia and many other important things for a trader and investor questions.

What is OPEC in simple words

is an international organization that unites the governments of 15 oil exporting countries. Initially, it consisted of 5 countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. It was created during the Baghdad Conference in 1960. Later, other states joined this country, such as Qatar, Libya, UAE, Nigeria and others. Indonesia and Gabon were also members of this organization at one time, but now they are no longer part of it.

OPEC is an abbreviation for The Organization of the Petroleum Exporting Countries (OPEC) - Organization of Petroleum Exporting Countries.

From 1960 to 1965, the headquarters of oil exporters OPEC was in Geneva, but already in September 1965 it began to be permanently located in Vienna.

The purpose of the organization is to unite oil exporting states to regulate economic policy in this industry: to ensure adequate prices for black gold, to ensure constant and fair supplies to consumer countries.

OPEC in simple words is an international organization created to ensure that all oil exporters and consumers have a good time.

Wikipedia says that OPEC is an organization that controls two-thirds of all oil reserves existing in the world. About a third of black gold production and half of exports go to the 15 countries that are part of this organization.

OPEC countries and OPEC oil production

Today the organization includes 15 countries (OPEC oil exporting countries):

1. Kuwait.
2. Qatar.
3. Algeria.
4. Libya.
5. Iraq.
6. Equatorial Guinea.
7. Venezuela.
8. Iran.
9. Nigeria.
10. Congo.
11. Gabon.
12. Ecuador.
13. Angola.

Despite the fact that the organization includes OPEC oil exporting countries from the most different parts world, the Kingdom of Saudi Arabia (KSA), as well as other states located on the Arabian Peninsula, have the greatest influence.

The thing is that it is KSA that has the ability to produce huge amounts of oil, while other states have both smaller oil reserves and less modern technologies.

It is for this reason that the organization's policies are largely determined by the monarchies of the Arabian Peninsula, although Iran, Venezuela and other countries also have a say.

OPEC countries, like other countries of the world, participate in world politics, and therefore are forced to follow various trends.

For example, Iran, which has been under Western sanctions for a long time, last years participated in OPEC affairs less and less, because its oil was not bought, fearing hostile actions on the part of the country that imposed these sanctions (USA, Britain and other states). If in the past the headquarters of this organization was in Geneva, Switzerland, today it is located in the capital of Austria - Vienna.

This organization consists of dependent from state oil. Any state can apply to join. Let us consider the states that are part of this intergovernmental organization in more detail.

Countries of Asia and the Arabian Peninsula

This category includes Iran, Iraq, Qatar, Kuwait, UAE and Saudi Arabia. Until January 2009, Indonesia was also on this list. Countries in this category are characterized by a monarchical system. There have been constant conflicts over black gold since the mid-twentieth century. In particular, wars are created specifically to destabilize the market for these raw materials.

South American countries

This category includes Venezuela and Ecuador. The first was one of the initiators of the creation of this organization. Recently, the economic situation of this country leaves much to be desired. Its national debt has risen due to the political crisis and falling oil prices. At one time, this country was quite developed because oil was expensive. The Venezuela example tells us how important diversification is.

As for Ecuador, this country has very big size government debt ( half of GDP). In addition, she had to pay $112 million for failure to fulfill obligations that were forty years ago, which greatly crippled the economy.

African countries

This country is characterized by low level life, including due to the oversaturation of the oil market. In addition, these OPEC member states have very large populations and high unemployment.

How OPEC affects the price of oil in examples

OPEC oil production quotas are powerful tools to influence the price of black gold, which are designed to reduce supply when demand is high. This practice has proven highly effective over several decades.

A quota is the amount of oil that can be supplied to participants in this intergovernmental organization.

This instrument was first used in 1973, when the issue size was reduced by 5%. As a result, the price of black gold increased by 70%. Another consequence of this decision is a war where the parties to the conflict were Israel, Syria and Egypt.

When members of this organization make a decision, trading activity in financial markets increases sharply, and this is a good opportunity for a trader to make money.

Major OPEC decisions on oil OPEC decision on oil prices:

1. The main task of this organization is to coordinate the actions of countries that supply oil to oil markets. The organization is engaged in the unification of oil policy, which is very important both for the organization as a whole and for each exporting country individually.
2. Another task of OPEC is to stabilize oil supplies, however, as history has shown, in reality this is not the case. Many OPEC countries (with the exception of the developed countries of the Arabian Peninsula) are Third World countries that have neither technology nor military force. KSA and other Arab countries can live without oil, but for other countries oil is the only source of income (for example, Iran and Gabon). As a result, they use oil as a weapon, constantly threatening other world states with an oil blockade in case of failure to comply with any decisions.

Iran constantly threatens to attack American ships that protect peace in the Arabian Gulf, demanding the lifting of sanctions.

OPEC's influence is exercised in much the same way as the influence of any other organization. In some cases, OPEC countries may reduce oil production, which will lead to an increase in its cost. They may also impose an oil embargo.

In the last century, this led to an energy crisis in Western Europe, when some EU countries refused to support Arab countries during a defensive war with Israel. After that, the whole world saw footage of how the head of the Netherlands was forced to get to work by bicycle.

OPEC is also trying to coordinate its actions with Russia in order to more effectively influence world prices.

• Some Western countries believe that OPEC is gradually monopolizing the oil market and is trying to exclude Iran from the cartel, since this country is subject to sanctions from many countries in the world and discredits OPEC by its very presence at the negotiating table.

Despite numerous accusations, OPEC plays an extremely important role in the world economy and politics, since even the most Hi-tech are not able to replace oil, which is the main source of energy on the planet.

OPEC Oil Production – Quotas and Regulations

The value of OPEC oil production quotas is influenced by the global situation on the black gold market. An additional element of regulation is monitoring compliance with agreements between participating countries. Another key concept regulation – “price corridor”. If the price goes beyond its limits, then a meeting is held, and the participants agree to adjust quotas so that quotations for raw materials remain within the established limit.

Reducing OPEC oil - simple, but effective method regulation of this market.

Oil production quotas are set based on oil reserves and technologies that the country has for its production. That's why the most a large number of Oil is supplied to the market by KSA. This is the most developed country of the cartel, which has the latest technologies and is capable, with the help of one of the strongest armies in the world, to provide security of oil supplies to any point on Earth.

Also, oil supply quotas may be reduced if prices for “black gold” fall. Some EU countries believe that in this way the cartel artificially inflates prices, but this sovereign right all cartel participants.

Also, OPEC's policies in the past made it possible to formulate a unified policy of struggle against oil corporations. As a result, both the attitude towards the cartel participants and the authority of this global organization changed. Since the organization includes almost all the largest oil suppliers, the effectiveness of the organization’s decisions is not in doubt.

OPEC basket and oil prices

People first started talking about the OPEC oil price basket in 1987. This is a collective concept that includes the prices of all types of oil produced in the participating countries, from which the arithmetic average was derived.

The price corridor is set based on the cost of the basket. Its highest price was recorded on July 3, 2008, when the average price for oil from OPEC member states was almost $141 per barrel.

Interesting situation regarding Indonesia. Despite the fact that it left OPEC in 2009, its oil was included in the basket in 2016.

History of OPEC relations with Russia

In the USSR in the 60s of the last century, the attitude towards OPEC was initially positive, because this organization served as a real counterweight to the oil monopolies of the West in the conditions Cold War. Soviet leaders then believed that if it were not for a certain brake in the form of the US allies among the developed Middle Eastern states, then the OPEC member countries could almost follow the path of communism, although this was impossible. This, as the future showed, did not happen.

At the same time, the USSR was, as it were, “on the sidelines” and was in no hurry to join the newly created organization, even despite the presence of allies in it. The Soviet Union did not like the then charter of the organization, in particular, the impossibility of becoming a first-class member. After all, only the founder could become it. In addition, there were points that were incompatible with a command economy (in particular, about investments from Western countries).

OPEC was first brought to the top of world politics during the first energy crisis of 1973-74. It broke out as a result of the oil embargo imposed by oil-producing Arab countries against Western countries– allies of Israel, and OPEC fully supported this action. Then many Western countries returned to the Middle Ages, as they ran out of fuel and energy. After this incident, world prices made a sharp threefold jump and brought the world oil market to a completely new stage of development.

At that time, the USSR, already among the world's largest suppliers of “black gold,” even considered the possibility of direct entry into OPEC, where its then friends of the USSR Iraq, Algeria and Libya played important roles. However, the matter did not come to accession, and this, most likely, was prevented by the OPEC Charter.

The fact is that he could not become a full member of the USSR, because he was not among the founders of this organization. Secondly, the Charter contained certain provisions that were then absolutely unacceptable for a closed and inefficient communist economy. For example, members of the organization had to ensure freedom of investment in their oil industry for oil consumers, namely the USA, Britain, France and other Western countries, as well as guarantee income and return of capital to investors. In the USSR, the concept of “private property” was quite vague, so ensuring this condition Soviet authorities could not.

OPEC and modern Russia

Concerning modern Russia, then its history of relations with OPEC began in 1998, when it became an observer. From now on, she takes part in the organization’s Conferences and other events related even to countries that are not part of it. Russian ministers regularly meet with the organization's top officials and colleagues. In relations with OPEC, Russia was also the initiator of some activities, in particular, Energy dialogue.

There are also difficulties in relations between OPEC and Russia. First of all, the first is afraid that Russia will increase its market share. In response to this, OPEC is going to reduce oil production, provided that the Russian Federation does not agree to do this. This is why it is impossible to restore world oil prices. In general, OPEC and Russian oil are a bit of a sore point in relations.

In general, relations between the Russian Federation and OPEC are favorable. In 2015, she was even invited to join the ranks of this country, but Russia decided to remain in the role of observer.

The oil cartel did not initially have the political influence it has now. At the same time, even the participating countries did not fully understand why they were creating it, and their goals were different. But now it is an important player in the black gold market, and here are some interesting facts about it.

1. Before OPEC was created, there were 7 transnational corporations that completely controlled the oil market. After this cartel appeared, the situation changed radically, and the monopoly of private companies disappeared. Now only 4 companies remain, because some were absorbed and some merged.
2. The creation of OPEC has changed the balance of power to such an extent that it now decides what the price of oil will be. If the price decreases, production immediately decreases and the cost of black gold increases. Of course, the strength of an organization is this moment not as big as before, but still decent.
3. OPEC countries control 70% of the world's oil. The downside to these statistics is that production is not independently audited, so you have to take OPEC's word for it. Although it is likely that this amount of OPEC oil reserves corresponds to reality.
4. OPEC was able to create a powerful energy crisis by increasing the price by 450%. Moreover, this decision was deliberate and was directed against the United States and other states supporting Israel during the war with Egypt and Syria. On the other hand, the emergence of the crisis led to the fact that many countries began to form strategic reserves of valuable fuel.

And finally, the main one interesting fact we will take it out separately. Despite the fact that OPEC has a significant influence on the price of oil, it does not directly depend on it. Prices are set during trading on exchanges. It’s just that the cartel knows the trader’s psychology well and knows how to force him to enter into transactions in the direction they want.

OPEC and traders

It would seem that an association of countries that produce 1.3–1.4 billion tons of oil in just 1 year and provide two-thirds of exports to the world market are able to effectively control prices. However, life has shown that in reality everything is more complicated. Quite often, especially recently, OPEC's efforts to adjust prices either do not produce the desired effects or even lead to unexpected negative results.

With its introduction in the early 1980s, the financial market began to have a much greater influence on the formation of prices for “black gold”. If in 1983 positions on oil futures for 1 billion barrels of oil were opened on the New York Mercantile Exchange, then in 2011 they were already opened for 365 billion barrels. And this is many times more than the entire world oil production.

In addition to the New York Mercantile Exchange, oil futures are traded on other exchanges. In addition, there are other financial instruments (derivatives) that are tied to oil.

Because of this, every time OPEC makes a decision to adjust world prices, it is actually only outlining the intended direction for changes in world prices. Players in financial markets actively promote and take advantage of fluctuations in fuel prices, thereby seriously distorting the effects that OPEC measures were designed to achieve.

Conclusion

OPEC appeared in 1960, when the colonial system of the world was almost destroyed and international arena New independent states began to emerge, mainly in Africa or Asia.

At that time, their mineral resources, including oil, were extracted by Western companies, the so-called Seven Sisters: Exxon, Royal Dutch Shell, Texaco, Chevron, Mobil, Gulf Oil and British Petroleum. OPEC destroyed the monopoly of American and British companies (as well as some other countries), freeing from colonial oppression many countries that were occupied by colonial empires. 2 ratings, average: 4,50 ). Please rate us, we tried very hard!

Vladimir Khomutko

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Organization of Petroleum Exporting Countries

OPEC is the Russian abbreviation OPEC - The Organization of the Petroleum Exporting Countries, which means Organization of Petroleum Exporting Countries.

It was founded in 1960, and currently its active members are the following states:

• Saudi Arabia.
• UAE (United Arab Emirates).
• Kuwait.
• Qatar.
• Venezuela.
• Ecuador.
• Algeria.
• Iran.
• Iraq.
• Libya.
• Nigeria.

Since the oil exporting countries included in this cartel produce almost half of the world's oil, OPEC is able to significantly influence oil prices. This cartel accounts for 40 percent of global black gold exports. In 1962, OPEC was registered by the UN as a full-fledged intergovernmental organization.

The main goals of this organization:

• unification of oil policy and coordination of joint actions of member countries;
• organizing effective individual and collective protection of their commercial interests;
• control of the stability of world oil prices;
• ensuring compliance with the following interests of the countries included in the cartel, namely:

1. maintaining a sustainable level of income;
2. efficient, cost-effective and regular supply of extracted products to consumers;
3. fair distribution of income received from investments in the oil industry;
4. environmental protection.

The founding countries of OPEC are full members of this organization. For other oil-producing countries to join this organization, they must submit applications, which are considered at the conference and can be either approved or rejected. To join OPEC, the application must be supported by at least three quarters of its active members.

OPEC structure

The highest body of this organization is the Conference of Ministers of the State Countries. In addition, day-to-day management is carried out by the Board of Directors, which is represented by one delegate from each state.

The conference outlines the main political directions of OPEC, as well as establishes ways to implement the cartel's policy and determines the means necessary for its practical implementation. In addition, this governing body reviews reports and recommendations provided by the Board of Directors, and also approves budgets necessary to implement policies. On behalf of the Conference, the Board of Directors prepares recommendation reports on all issues that, in one way or another, are of interest to OPEC.

The Board of Directors (Managers) is also appointed by the Conference. It usually includes the ministers of oil, oil industry or energy of OPEC member countries. Also at the Conference, a president is elected and a secretary general of the cartel is appointed.

The Secretariat reports to the Board of Directors. The Secretary General is the highest official of this organization and its official authorized representative. He also heads the OPEC Secretariat.

His main task is to organize and manage current work. Currently (since 2007) this post is occupied by Abdullah Salem al-Badri. The OPEC Secretariat consists of three departments.

The structure of this organization has a special economic commission, which is responsible for all issues related to the stability of world oil markets and compliance with fair price levels.

In order for OPEC oil to maintain its global strategic importance as a primary energy resource (the main task of OPEC), this commission constantly monitors all changes occurring in world energy markets and regularly brings news to the Conference about their nature and possible causes.

Since its founding (1960), OPEC's main task has been to develop and subsequently present a unified position of all its member countries in order to limit the influence of the world's largest oil corporations on the market.

However, in reality, the organization was not able to change the balance of power in this market until 1973. Significant changes to this arrangement were made by the sudden outbreak of an armed conflict in 1973, in which, on the one hand, Syria and Egypt participated, and on the other, Israel.

The active support of the United States allowed Israel to quickly regain its lost territories, as a result of which the parties signed an agreement to cease hostilities in November.

In October of the same 1973, the OPEC countries opposed the US policy and imposed an embargo on the sale of oil to this country, while simultaneously raising selling prices for oil by 70 percent for those Western European countries that acted as allies of the United States.

In one piece, this news raised the price of a barrel of black gold from 3 US dollars to 5.11. In January 1974, the organization further increased the price to 11.65 US dollars per barrel. All these events occurred at a time when 85 percent of Americans could not imagine themselves without a personal car.

Despite President Nixon's stringent measures to limit the use of energy resources, the domestic economic situation has deteriorated sharply. There has been a serious decline in economic development in the West. At the peak of this crisis, a gallon of gasoline in the United States began to cost $1.2 instead of 30 cents.

Wall Street reacted immediately to this news. On the one hand, the wave of super profits sharply raised the prices of shares of oil producing companies, and on the other, all other shares fell in price by the end of 1973 by an average of 15 percent.

During this time period, the Dow Jones Industrial Average fell from 962 to 822 points. Despite the fact that the embargo against the United States was lifted in March 1974, the consequences of this OPEC decision were not ironed out for a long time. The Dow Jones fell over the next two years, falling 45 percent between 1973 and December 1974, from 1,051 to 577.

In spite of the crisis of the Western economy, oil revenues of the main Arab oil-producing states at the same time grew at a very rapid pace.

For example, Saudi Arabia increased its profits from 4 billion 350 million to 36 billion dollars. For Kuwait, this figure jumped from 1.7 billion to 9.2, and in Iraq - from 1.8 to 23.6 billion US dollars.

Huge profits from the sale of black gold led to the fact that in 1976 OPEC created a Fund within its structure international development, which was a powerful financial institution whose goal was to finance the further development of the industry.

The headquarters of this Fund was established in Vienna (the same as the headquarters of OPEC). The main task of this Fund was to organize all possible assistance to ensure cooperation between OPEC countries and other developing countries.

The OPEC Fund issues loans on preferential terms, and these loans are divided into three types:

• for the implementation of OPEC-approved projects;
• for implementation government programs development of the oil industry;
• to maintain the balance of payments.

The material resources managed by the Fund consist of contributions voluntarily made by member states of the organization, as well as profits received as a result of the investment and lending activities of the Fund itself.

The end of the 70s of the last century was marked by a reduction in global consumption of petroleum products, and there were several reasons for this.

Firstly, countries that are not members of OPEC have become more active in the world oil market.

Secondly, energy consumption has been greatly affected by the economic downturn in Western countries.

Thirdly, efforts to reduce energy consumption have begun to bear fruit.

It got to the point that the United States, extremely concerned about the high activity of the Soviet Union in this region (especially after Soviet troops entered Afghanistan), in order to avoid possible economic shocks in oil-producing countries, threatened to use military force if the situation with oil supplies repeated. All this led to a gradual decline in oil prices.

Despite all the measures taken, 1978 was the year of the second oil crisis, the main reasons for which were the revolution in Iran and the powerful political resonance caused by the Israeli-Egyptian agreements reached at Camp David. In 1981, the cost of a barrel reached $40.

The weakness of OPEC became most fully visible in the early 80s of the twentieth century, when the full-scale development of new deposits of black gold in countries outside the cartel, as well as the widespread introduction of energy-saving technologies and the general stagnation of the world economy sharply reduced the demand for this raw material in the most industrially developed countries. The result is an almost two-fold drop in oil prices.

Over the next five years, everything was calm on the market, and the oil price gradually decreased.

Everything changed in December 1985, when oil production by OPEC countries increased sharply (to 18 million barrels per day). This was the beginning of a real price war, which was provoked by Saudi Arabia.

As a result of this process, oil prices fell by more than half in just a few months - from 27 US dollars per barrel to 12.

The next oil crisis began in 1990.

In August of this year, Iraq attacked Kuwait, which led to a sharp jump in oil prices - from 19 dollars in July to 36 dollars in October. It is worth saying that then oil prices returned to their previous level, even before the United States launched the military operation Desert Storm, which led to the defeat of Iraq and ended with the economic blockade of this state.

Despite the fact that in most OPEC member countries there was a constant overproduction of oil, and despite the fact that competition from countries outside the cartel in the oil market increased significantly, oil prices were quite stable during the 90s (compared to sharp fluctuations of the eighties).

Another drop in the cost of a barrel began at the very end of 1997, which led to the largest global oil crisis in history in 1998.

Many experts blame OPEC for this crisis, which in November 1997, at its conference in Jakarta, decided to increase the level of oil production, as a result of which the organization seemed to export additional oil volumes, and oil prices went down sharply. However, in defense of OPEC, it is worth saying that the joint efforts of this organization and non-member oil-producing states, undertaken in 1998, made it possible to prevent a further collapse in world prices. If not for these measures, many analysts agree that black gold could have fallen in price to 6-7 dollars per barrel.

The crisis, which began at the end of 2014 and continues to this day, forced OPEC to once again sit down at the negotiating table with other oil-producing powers. The decision taken by this organization to limit oil exports in 2016, which was carried over to 2017, and the reduction in production volumes had a beneficial effect on oil prices, although it is too early to talk about the final stabilization of the energy market.

Russians rarely pay attention to headlines like “OPEC agreement,” “shale revolution,” or “sanctions against Iran,” considering them boring and uninteresting. Meanwhile, oil trading is one of the main sources of income for the Russian state budget, and it is the OPEC countries that determine the rules of the game in the global energy market. The influence of this organization on world economy huge, although she now faces some difficulties.

Despite the frequent use of this designation, most of our citizens do not know what OPEC stands for, what this organization does, and who its members are.

Since its founding, OPEC has constantly been the target of criticism. Among the main complaints are cartel collusion and inflated oil prices. Moreover, they come not only from ordinary market participants or industry experts, but also from “ powerful of the world this." For example, accusations against OPEC regularly appear on Twitter of US President Donald Trump - he calls on the alliance to reduce prices. Moreover, the Americans are developing an anti-cartel law, NOPEC, which will allow them to sue the organization. However, the prospects for its adoption look very vague.

In recent years, the OPEC organization has been losing its former power, and the reason for this is the American “shale revolution” and constant discord between members of the alliance. There was even talk about the possible collapse of OPEC or its significant reformatting. Since 2016, Russia has been actively cooperating with the organization, coordinating restrictions on oil production. This situational alliance made it possible to significantly increase the price of “black gold”. One way or another, changes in the organization are inevitable, because we live in an era of transformation of the global energy market. Before talking about current problems, it is necessary to explain what OPEC is, what its goals and objectives are, and also say a few words about the history of the alliance.

What is OPEC and what is its share in oil production

Oil is the most important energy resource for humanity. The Organization of Petroleum Exporting Countries - this is the abbreviation OPEC - was created to regulate the production of “black gold” and ensure stability of supplies. The alliance was founded in September 1960. OPEC's headquarters are located in Vienna.

Today, the organization includes fourteen states; Qatar left it in January 2019. ORES is led by Mohamed Barkindo, who was appointed Secretary General in August 2016. The official website of the alliance is opec.org, the emblem is a blue field with a stylized name of the organization.

Which countries are part of OPEC? If you look at the world map, it is easy to see that the alliance members are located in Africa, Asia and South America. There is not a single Western state included.

Here is a list of OPEC countries:

• Angola;
• Venezuela;
• Saudi Arabia,
• Algeria;
• Gabon,
• Iran;
• Iraq;
• Kuwait;
• Congo;
• Libya;
• Nigeria;
• Equatorial Guinea;
• Ecuador.

Today, the alliance controls about two-thirds of total oil reserves. OPEC accounts for more than a third of its production and about half of global exports. Today, proven oil reserves amount to 1199.71 billion barrels. In June 2016, total OPEC production reached 32.643 million barrels per day. The largest supplier of raw materials is Saudi Arabia: it accounts for 10.308 million barrels per day.

The Alliance has enormous political influence, although it was initially created as an international commodity association, which is clearly stated in its Charter.

Organizational goals and structure

The main goals declared by OPEC are the coordination of oil production and the development of a unified policy in this area.

This allows members of the organization to provide:

• Stability of supplies of raw materials to consumers;
• Predictability of oil prices;
• Making a profit from investments in the oil industry.

In practice, this happens as follows: twice a year, relevant ministers meet in Vienna to discuss the current situation on the market. Based on the assessments and forecasts made, decisions are made regarding production volumes. Moreover, they can be either reduced or increased. After which comes the most exciting moment - new quotas are established for each member of the organization.

Decisions regarding oil production volumes are made at OPEC Conferences, held twice a year. In the alliance structure, they are considered the highest governing body responsible for making the most important decisions. At conferences, budgets are approved, reports on their implementation are made, new members are accepted, and a secretary and his deputies are appointed.

The Alliance has an executive body - the Board of Governors. He prepares the agenda for meetings and draft budgets. It employs dozens of people, divided into several departments.

How and why OPEC was created

OPEC appeared in the difficult post-war period, when the foundations of the modern world order were being laid. The colonial system was collapsing, sources of strategic raw materials were slipping from the tenacious hands of global corporations and coming under the control of national governments.

In those years, oil production was controlled by several largest companies, they were called that way - “Seven Sisters”: Shell, Exxon, Texas, Mobil, Chevron, British Petroleum and Gulf Oil. They formed a cartel, but acted in the interests of the largest consumers of energy resources - they kept prices low. It is clear that such a policy did not suit the countries where oil was produced at all.

Awareness of the need to protect one's own economic interests arose in the Middle East long before the formation of the alliance. In 1953, an agreement was signed between the Iraqis and the Saudis to coordinate the production and sale of oil. The last straw that broke the patience of the oil-producing states was another reduction in purchase prices by the Seven Sisters.

In 1959, a meeting of the League of Arab States was held - its main topic was “oil” issues. Venezuela was invited to the event, which put forward the initiative to form OPEC. In September 1960, it was announced the creation of an organization that would represent the interests of oil exporters. It included five states: Venezuela, Kuwait, Saudi Arabia, Iran and Iraq. In 1961, at the second conference, which took place in Caracas, the charter of the alliance was approved.

In 1962, the newly created organization officially registered with the UN. In 1968, a framework declaration of the alliance was approved, which emphasized the right of independent states to independently dispose of natural resources located on their territory.

In this decade, new members joined the organization: Algeria, Libya, Indonesia, UAE.

At this time, the attitude towards OPEC can be called ambiguous. The collective West took a wary, even hostile position, because the alliance was taking control of the most important strategic resource, which had previously been the undivided control of American and European companies. In the Soviet Union, the creation of the organization was initially welcomed: it fully fit into the communist paradigm of the struggle of oppressed peoples against Western imperialism.

At one time Moscow even thought about joining OPEC, especially since it already included Algeria, Libya and Iraq, which were considered friends of the USSR. However, it soon became clear that the organization’s Charter required freedom of investment in the oil industry, which was unacceptable for the closed Soviet economy.

70s and 80s: OPEC at its peak

In the 1970s, OPEC's influence on global economy increased significantly: it could already regulate global crude oil prices. The organization has become more numerous - Nigeria, Ecuador and Gabon have joined it.

The power of the alliance was clearly demonstrated during the crude oil embargo, which led to an acute energy crisis in the United States and Europe. This is how the Arab countries decided to punish Israel's allies after the Yom Kippur War. Sudden jump prices showed the critical dependence of developed countries on the cost of energy resources.

These events had serious and far-reaching consequences. For the first time, they forced the West to think seriously about its energy security. The Strategic Petroleum Reserve was created in the United States, and similar reserves appeared in many other countries. Energy-saving technologies have begun to be introduced around the world.

Thanks to the Arab embargo, the USSR was able to significantly strengthen its position in the global energy market: oil exports to the West from recently discovered Siberian fields increased significantly. This, as well as the multiple increase in the cost of “black gold”, ensured a “period of stagnation” - an era that many of our fellow citizens still remember with nostalgia.

In the early 80s, prices reached their maximum, after which they rapidly went down: in the middle of the decade, one barrel cost about ten bucks. At the same time, the alliance’s share in global production and revenue from the sale of raw materials collapsed. The organization managed to level the situation by introducing quotas for its members, as well as changing the pricing mechanism - the so-called OPEC basket appeared.

The end of the past and the beginning of the current millennium

The 1990s were a period of predominantly low oil prices. This was the result of a slight slowdown in the global economy and several crises in the Asian region. At this time, for the first time, the topic of climate change appeared on the global agenda due to carbon dioxide emissions into the atmosphere.

The price of “black gold” began to rise around 2004, which was facilitated by several factors. The Americans started another war in the Middle East, China's economy was growing rapidly, demanding more and more energy, and financial and stock market speculation began to have a significant impact on the cost of energy resources. By 2008, the price of one barrel exceeded one hundred dollars, but the crisis that occurred brought it down to minimum levels. In 2007, Angola joined the alliance.

At the end of the 2000s, the “shale revolution” began in the United States, which led to the emergence of new, very significant volumes of raw materials on the market. And if in 2007 the Americans produced 2.3 million barrels of shale oil per day, then last year its quantity increased to 6.2 million barrels.

In 2014, OPEC states were unable to agree on a reduction in production quotas, which led to a catastrophic drop in the price to $26. In 2016, the Saudis were able to reach a record level of 10.67 million barrels per day. It was possible to achieve consensus only at the beginning of 2017, which allowed prices to return to the $50-60 range.

Cooperation between OPEC and Russia

In 1998, our country became an observer in OPEC. Since then, Russian relevant ministers have been meeting with their colleagues from the alliance and taking part in its conferences. In 2015, Russia received an offer to join the organization, but it was rejected.

Since 2016, the OPEC+ formula has been in force, according to which Russia, together with the alliance, coordinates the amount of oil produced. At the end of last year, after a long and fierce debate, a decision was made to reduce overall production by 1.2 barrels per day, of which our country accounted for 228 thousand barrels.

We can confidently say that today OPEC alone will not be able to raise and lower prices, as in the “good old days.” For a significant change in market conditions, Russia's participation is necessary.

Problems of the organization and possible ways to solve them

Now the main problem of OPEC is a significant increase in oil production in countries that are not members of the alliance. The most serious challenge, of course, is the growth of American shale oil production, but other countries are also confidently increasing volumes. All this has led to an oversupply on the market, which is driving down prices. OPEC can no longer act as before: each time they reduce production, the countries that are members of the alliance essentially give up a piece of the market to American shale producers and other producers.

Another problem is contradictions within the alliance itself. The countries of the Middle East have relatively small populations and huge oil reserves at low cost. Therefore, they can easily reduce production volumes. States such as Venezuela, Angola, Nigeria have huge social problems, which forces them to fight for every barrel of quota. Most likely, due to the rapid growth of renewable energy, oil consumption will begin to decline in the coming years, which will further reduce OPEC's market share. Therefore, many industry experts believe that OPEC will not be able to pursue a coordinated policy in the field of oil production, and the organization will collapse.

In addition, it is difficult to monitor how conscientiously OPEC members fulfill their obligations. Exceeding quotas has been a perennial problem for organizations. Another constant “trouble” of OPEC is political and social instability in the alliance countries. Today, conflicts are raging in Libya, Iraq, Nigeria, and Venezuela is experiencing serious storms.

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