Nigeria custodianship All about oil

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.

List of African countries included in OPEC

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

• Gabon;
• Equatorial Guinea;
• Angola;
• Libya;
• Nigeria;
• Algeria.

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, and the 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. There is a civil war in Iraq and Libya. 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:

• Russia;
• China;

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.

Many companies and specialist representatives from OPEC member countries come to the rather large Neftegaz exhibition held in Moscow.

A prerequisite for the creation of the Organization of Petroleum Exporting Countries (OPEC, the original abbreviation in English language- OPEC) was the lack of ability for the states of the Middle East region and the Middle East to independently resist the neo-colonial policies pursued against their interests, as well as the glut of oil on the world market. The result is a sharp decline in prices and a steady trend for further decline. Fluctuations in the price of oil became noticeable for established exporters, were uncontrollable, and the consequences were unpredictable.

To avoid a crisis and save the economy, representatives of the governments of the interested parties in Iraq, Iran, Kuwait, Saudi Arabia and Venezuela met in Baghdad (September 10 - 14, 1960), where they decided to establish the Organization of Petroleum Exporting Countries. Half a century later, this association remains one of the most influential for the world economy, but is no longer key. The number of OPEC countries changed periodically. now this 14 oil producing states.

Historical reference

Before the Baghdad conference, prices for “black gold”; dictated by an oil cartel of seven Western oil companies called the “Seven Sisters.” Having become members of the OPEC association, the member countries of the organization could jointly influence the pricing and volume of oil sales. The history of the development of the organization in stages is as follows:

• August 1960 The price drops to a critical level after new players (USSR and USA) entered the oil arena.
• September 1960. A meeting of representatives of Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela is held in Baghdad. The latter initiated the creation of OPEC.
• 1961-1962 entry of Qatar (1961), Indonesia (1962), Libya (1962).
• 1965 Beginning of cooperation with the UN Economic and Social Council.
• 1965-1971 The membership of the association was replenished due to the entry of the United Arab Emirates (1965), Algeria (1969), Nigeria (1971).
• October 16, 1973 Introduction of the first quota.
• 1973-1975 Ecuador (1973) and Gabon (1975) joined the organization.
• 90s. Gabon's withdrawal from OPEC (1995) and Ecuador's voluntary suspension (1992).
• 2007-2008 Resumption of activity by Ecuador (2007), suspension of Indonesia's membership (January 2009 became an importer). Entry into the Union of Angola (2007). Becomes an observer Russian Federation(2008) without the obligation to obtain membership.
• 2016 Indonesia renewed its membership in January 2016, but decided to suspend its membership again on November 30 that year.
• July 2016 Gabon rejoined the organization.
• 2017 accession of Equatorial Guinea.

Within 10 years of its founding, OPEC members experienced rapid economic growth, peaking between 1974 and 1976. However, the next decade was marked by another drop in oil prices, by half. It is easy to trace the relationship between the periods described and turning points in the history of world development.

OPEC and the world oil market

The object of OPEC's activity is oil, and to be precise, its cost. The opportunities provided by joint management of the petroleum products market segment allow you to:

• protect the interests of the states that are part of the organization;
• ensure control over the stability of oil prices;
• guarantee uninterrupted supplies to consumers;
• provide the economies of the participating countries stable income from oil production;
• predict economic phenomena;
• develop a unified industry development strategy.

Having the ability to control the volumes of oil sold, the organization sets itself precisely these goals. Currently, the production level of the participating countries is 35% or 2/3 of the total. All this is possible thanks to a clearly structured, well-functioning mechanism.

OPEC structure

The community is organized in such a way that the decisions taken do not contradict the interests of any of the OPEC member countries. A structured diagram taking into account the importance of divisions looks like this:

• OPEC conference.
• Secretariat headed by the Secretary General.
• Board of Governors.
• Committees.
• Economic Commission.

The conference is a meeting held twice every year at which ministers from OPEC member countries discuss key strategic issues and make decisions. Representatives are also appointed here, one from each member state, who form the board of governors.

The Secretariat is appointed as a result of a meeting of the commission, and the task Secretary General is to represent the organization’s position in interactions with other associations. Whatever country is part of OPEC, its interests will be represented by one person (the Secretary General). All his actions are the product of decisions made by the organization’s management after a collegial discussion at the conference.

Composition of OPEC

OPEC includes countries whose financial well-being directly depends on fluctuations in the global oil market. Any state can apply. Today, the geopolitical composition of the organization is as follows.

Countries of Asia and the Arabian Peninsula in OPEC

This part of the world map is represented in OPEC by Iran, Saudi Arabia, Kuwait, Iraq, Qatar, the United Arab Emirates and Indonesia (until its release in January 2009). Although the latter has a different geographical location, its interests have continuously intersected with other Asian partners since the emergence of the Asia-Pacific Economic Cooperation Forum (AREC).

Countries on the Arabian Peninsula are characterized by monarchical rule. Confrontations have not stopped for centuries, and since the mid-20th century, people have been dying for oil all over the world. A series of conflicts is plaguing Iraq, Kuwait, and Saudi Arabia. Wars are sparked to destabilize the oil market and, as a result, increase the number of petrodollars earned, increasing the demand for oil.

South American countries that are members of OPEC

Latin America is represented by Venezuela and Ecuador. The first is the initiator of the creation of OPEC. Venezuelan government debts last years grew up. The reason is political instability and falling prices on the world oil market. This state prospered only if the cost of a barrel of oil was above average.

Ecuador is also unstable due to its public debt of 50% of GDP. And in 2016, the government of the country had to pay 112 million dollars as a result of the court. American corporations Chevron for failure to fulfill obligations assumed 4 decades ago as part of the development of South American oil fields. For a small state this is a significant part of the budget.

African countries and OPEC

OPEC's actions protect the welfare of 6 out of 54 African countries. Namely, the interests of:

• Gabon;
• Equatorial Guinea;
• Angola;
• Libya;
• Nigeria;
• Algeria.

This region has high performance population, as well as unemployment and the number of people below the poverty line. Again, this is due to the low price of a barrel of oil, the high level of competition and the oversaturation of the oil market with raw materials.

OPEC quotas are leverage on the world economy

The raw material production quota is the norm for oil exports established for community members. October 1973 was the moment when an agreement was signed to reduce output by 5%. Decision changes in production volumes implied a price increase of 70%. These steps were a consequence of the outbreak of the Yom Kippur War, in which Syria, Egypt, and Israel participated.

Another agreement to reduce oil production, adopted the day after the introduction of the first quota. An embargo was imposed on the USA, Japan and some Western European countries. Within a month, quotas were introduced and abolished, determining to whom, how many barrels of oil per day to put up for sale, and at what price to sell the extracted raw materials.

Over the decades, practice has repeatedly confirmed the effectiveness of these levers of influence, proving the power of the exporting community. OPEC decisions on oil production are made after discussion of the issue by representatives of the organization's member countries.

Russia and OPEC

The influence of the exporting community has declined in recent years, which has made it impossible to pursue a monopoly policy, imposing unfavorable conditions on others. This became possible after oil producers from China, the United States, and the Russian Federation entered the arena. In order for the actions of the community of oil exporting countries to be controlled (not to go beyond the limits where they could harm states that do not have membership), the Russian Federation, represented by the government, took on the role of observer. Russia is an official observer in OPEC, while at the same time representing a counterweight. It has the ability to reduce the price of a barrel by increasing production levels, thereby influencing the global market.

OPEC problems

The main difficulties that we have to deal with are contained in the following theses:

• 7 out of 14 members are at war.
• Technological imperfection, lag behind progress, feudal atavism political system some participating countries.
• Lack of education, lack of qualified personnel at all levels of production in most participating countries.
• Financial illiteracy of the governments of most OPEC member countries, unable to adequately manage large profits.
• Growing influence (resistance) of states that are not members of the coalition.

Under the influence of these factors, OPEC ceased to be the leading regulator of the stability of the commodity market and the liquidity of the petrodollar.

Details Organizations

(transliteration of the English abbreviation OPEC - The Organization of Petroleum Exporting Countries, literally translated - Organization of Petroleum Exporting Countries) is an international intergovernmental organization of oil-producing countries created to stabilize oil prices.

Organization of Petroleum Exporting Countries

Date of foundation

Start date of activity

Headquarters location

Vienna, Austria

Secretary General

Mohammad Sanusi Barkindo

Official site

OPEC's goal is to coordinate activities and develop a common policy regarding oil production among the member countries of the organization, maintaining the stability of world oil prices, ensuring uninterrupted supplies of raw materials to consumers and obtaining returns from investments in the oil industry.

OPEC's influence on the oil market

According to estimates by the International Energy Agency (IEA), OPEC countries account for more than 40% of world oil production and about 60% of the total volume of oil traded on the international market.

The price of oil is dictated primarily by the balance of supply and demand. And supply, as can be seen from the statistics above, is determined by the actions of OPEC. It is for this reason that the Organization of Petroleum Exporting Countries plays an extremely important role in the oil industry.

Even though many experts have recently seen a decrease in OPEC's influence on the oil market, oil prices still largely depend on the organization's actions. History knows many examples when instability in the market was caused by simple rumors related to the actions of an organization, or a statement by one of the members of the OPEC delegation.

OPEC's main tool for regulating oil prices is the introduction of so-called production quotas among the organization's members.

OPEC quotas

OPEC quota– the maximum volume of oil production established at a general meeting both for the entire organization as a whole and for each individual OPEC member country.

Reduction general level cartel production by distributing oil production from OPEC countries quite logically leads to an increase in prices for black gold. When quotas were abolished (this has happened in the history of the oil industry), oil prices dropped significantly.

The system of setting quotas or “production ceilings” was prescribed in the organization’s Charter, approved in 1961. However, this method was first used only at the 63rd extraordinary OPEC conference on March 19-20, 1982.

Organization of Petroleum Exporting Countries in Figures

1242.2 billion barrels

Total proven oil reserves of OPEC member countries

Share of reserves of member countries of the organization from all world oil reserves

39,338 thousand barrels per day

Volume of oil production by OPEC countries

OPEC's share in world oil production

Share of global OPEC exports

BP Energy Review 2018 data.

*Data from the International Energy Agency for 2018.

OPEC countries

The organization was formed during an industry conference in Baghdad on September 10-14, 1960, on the initiative of five developing oil-producing countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

Subsequently, countries whose economies are directly dependent on oil production and export began to join the organization.

Despite the fact that OPEC includes countries from different parts light, historically has the greatest influence within the cartel Saudi Arabia and other states of the Middle East.

This preponderance of influence is due not only to the fact that some of these countries are the founders of the organization, but also to the huge oil reserves concentrated on the territory of the Arabian Peninsula and Saudi Arabia in particular. high level production, as well as the presence of the most modern technologies extracting this mineral to the surface. For comparison, in 2018, Saudi Arabia produced an average of 10.5 million barrels per day, and the country with the closest production level among the cartel participants, Iran, produced 4.5 million barrels per day.

As of the end of 2019, the organization includes 14 countries. Below is a table with a list of states that are part of OPEC, in the order of their entry into the organization.

Years of Membership

Oil and condensate production, million barrels

Proven reserves, billion tons

Near East

Near East

Near East

Saudi Arabia

Near East

Venezuela

South America

North Africa

United United Arab Emirates

Near East

North Africa

West Africa

South America

1973 - 1992,
2007 -

Central Africa

1975 - 1995,
2016 -

South Africa

Equatorial Guinea

Central Africa

Central Africa

*Ecuador was not a member of the organization from December 1992 to October 2007. In 2019, the country announced that it would leave OPEC on January 1, 2020.

**Gabon suspended membership in the organization from January 1995 to July 2016.

In addition, OPEC included:

Indonesia (from 1962 to 2009, and from January 2016 to November 30, 2016);
- Qatar (from 1961 to December 31, 2018).

To approve the admission of a new member to the organization, the consent of three quarters of the existing members, including all five founders of OPEC, is required. Some countries wait several years for approval of membership in the organization. For example, Sudan submitted an official application in October 2015, but is currently (end of 2019) still not a member of the organization.

Each cartel member is required to pay an annual membership fee, the amount of which is set at an OPEC meeting. The average contribution is $2 million.

As mentioned above, there have been several points in the organization's history when countries terminated or temporarily suspended membership. This was mainly due to the disagreement of countries with the production quotas introduced by the organization and the reluctance to pay membership fees.

Organization structure

OPEC meetings

The highest governing body of the Organization of Petroleum Exporting Countries is the Conference of Participating Countries, or as it is more often called, the OPEC meeting or meeting.

OPEC meets twice a year, and if necessary, extraordinary sessions are organized. The meeting place, in most cases, is the headquarters of the organization, which has been located in Vienna since 1965. From each country, a delegation is present at the meeting, headed, as a rule, by the ministers of oil or energy of the corresponding country.

President of the Conference

The meetings are presided over by the President of the Conference (OPEC President), who is elected every year. Since 1978, the position of deputy president has also been introduced.

Each member country of the organization appoints a special representative, from whom the Board of Governors is formed. The composition of the council is approved at an OPEC meeting, as is its chairman, who is elected for a term of three years. The functions of the council are to manage the organization, convene Conferences and draw up the annual budget.

Secretariat

The executive body of the Organization of Petroleum Exporting Countries is the Secretariat, headed by Secretary General. The Secretariat is responsible for the implementation of all resolutions adopted by the Conference and the Governing Council. In addition, this body conducts research, the results of which are key factors in the decision-making process.

The OPEC Secretariat includes the Office of the Secretary General, the Legal Division, the Research Division and the Support Services Division.

Informal OPEC meetings

In addition to official meetings, informal OPEC meetings are organized. At them, members of the organization discuss issues in a consultative – preliminary mode, and later at an official meeting they are guided by the results of such negotiations.

OPEC observers

Since the 1980s, representatives of other oil-producing countries outside the organization have been present at OPEC meetings as observers. In particular, many meetings were attended by representatives of countries such as Egypt, Mexico, Norway, Oman, and Russia.

This practice serves as an informal mechanism for coordinating the policies of non-OPEC and OPEC countries.

Russia has been an OPEC observer country since 1998, and since then has regularly participated in extraordinary sessions of the organization’s ministerial conferences in this status. In 2015, Russia was offered to join the main structure of the organization, but representatives of the Russian Federation decided to leave observer status.

Since December 2005, a formal energy dialogue between Russia and OPEC has been established, within the framework of which it is planned to organize annual meetings of the Minister of Energy of the Russian Federation and the Secretary General of the organization alternately in Moscow and Vienna, as well as holding expert meetings on the development of the oil market.

It is worth noting that Russia has a significant influence on OPEC policy. In particular, members of the organization are afraid of a possible increase in Russian production volumes, and therefore refuse to reduce production unless Russia does the same.

OPEC+ (Vienna Group)

In 2017, a number of non-OPEC oil-producing countries agreed to participate in oil production cuts, thus strengthening coordination in the global market. The group included 10 countries: Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan.

Thus, together with the organization’s participants, 24 countries support production reduction. This general group and the agreement itself between 24 countries is called OPEC+ or in some, mainly foreign sources, the Vienna Group.

OPEC reports

The Secretariat of the Organization of the Petroleum Exporting Countries produces several periodic publications that contain information about its activities, statistics on the main indicators of the global oil industry in general and cartel participants in particular.

The Monthly Oil Market Report (MOMR) analyzes the most important issues facing the global oil community. Along with an analysis of supply and demand, the report provides an assessment of the dynamics of oil prices, raw materials and commodity markets, refining operations, inventories and tanker market activity.
- The OPEC Bulletin - OPEC's monthly newsletter is the organization's leading publication, which contains feature articles on the activities and events of the Secretariat, as well as news about member countries.
- The World Oil Outlook (WOO) - An annual summary of the Organization of Petroleum Exporting Countries' medium- and long-term forecasts for the world oil market. The report uses a variety of scenarios and analytical models to bring together a variety of factors and issues that could impact the oil industry as a whole and the organization itself in the coming years.
- The Annual Statistical Bulletin (ASB) - The annual statistical bulletin - combines statistical data from all member countries of the organization and contains about 100 pages with tables, charts and graphs detailing world oil and gas reserves, oil production and production of petroleum products, export data and transportation, as well as other economic indicators.

In addition, it is worth noting such publications as the Annual Report, the quarterly OPEC Energy Review and the Long-Term Strategy published every five years.

Also on the organization’s website you can find “Frequently Asked Questions” and a brochure “Who Gets What from Oil?”

OPEC oil basket

To more effectively calculate the cost of oil produced in member countries of the organization, the so-called “OPEC oil basket” was introduced - a certain set of types of oil produced in these countries. The price of this basket is calculated as the arithmetic average of the cost of the varieties included in it.

Prerequisites for creation and history of the organization

Post-World War II period

In 1949, Venezuela and Iran made the first attempts to create an organization, inviting Iraq, Kuwait and Saudi Arabia to establish links between oil-exporting countries. At that time, production was just beginning at some of the world's largest fields in the Middle East.

After World War II, the United States was the largest producer and at the same time the largest consumer of oil. The world market was dominated by a group of seven multinational oil companies known as the "Seven Sisters", five of which were based in the United States and were formed as a result of the collapse of the Rockefeller Standard Oil monopoly:

Exxon
Royal Dutch Shell
Texaco
Chevron
Mobile
Gulf Oil
British Petroleum

Thus, the desire of oil exporting countries to unite was dictated by the need to create a counterbalance to the economic and political influence of the transnational group “Seven Sisters”.

1959 – 1960 Anger of exporting countries

In February 1959, as supply options expanded, the Seven Sisters multinationals unilaterally reduced the price of Venezuelan and Middle Eastern crude oil by 10%.

A few weeks later, the first Arab Petroleum Congress of the Arab League took place in Cairo, Egypt. The congress was attended by representatives of the two largest oil-producing countries after the USA and the USSR - Abdullah Takiri from Saudi Arabia and Juan Pablo Perez Alfons from Venezuela. Both ministers expressed outrage at the decline in commodity prices, and instructed their colleagues to conclude the Maadi Pact, or Gentlemen's Agreement, calling for the creation by exporting countries of an "oil advisory commission" to which multinational companies should submit plans for changes in commodity prices.

There was hostility towards the West and protest against the “Seven Sisters”, who at that time controlled all oil operations in exporting countries and had enormous political influence.

In August 1960, ignoring warnings, multinational companies again announced cuts in Middle Eastern oil prices.

1960 – 1975 Founding of OPEC. The first years.

On September 10 - 14, 1960, on the initiative of Abdullah Tariqi (Saudi Arabia), Perez Alfonso (Venezuela) and Iraqi Prime Minister Abd al-Karim Qassim, the Baghdad Conference was organized. At the meeting, representatives from Iran, Iraq, Kuwait, Saudi Arabia and Venezuela met to discuss rising prices for oil produced by their countries, as well as policies to respond to the actions of multinational companies.

As a result, despite strong opposition from the United States, the above five countries formed the Organization of Petroleum Exporting Countries (OPEC), the purpose of which was to ensure best price for oil, regardless of large oil corporations.

Initially, Middle Eastern member countries called for the organization's headquarters to be located in Baghdad or Beirut. However, Venezuela advocated a neutral location, which served as the location of the headquarters in Geneva (Switzerland).

In 1965, after Switzerland refused to renew diplomatic privileges, OPEC headquarters were moved to Vienna (Austria).

During 1961 – 1975, the five founding countries were joined by: Qatar, Indonesia, Libya, United Arab Emirates (initially only the Emirate of Abu Dhabi), Algeria, Nigeria, Ecuador and Gabon. By the early 1970s, OPEC member countries accounted for more than half of world oil production.

On April 2, 1971, the Organization of Petroleum Exporting Countries signed the Tripoli Agreement with major oil companies doing business in the Mediterranean region, which resulted in higher oil prices and increased profits for producing countries.

1973 – 1974 Oil embargo.

In October 1973, OAPEC (Organization of Arab Petroleum Exporting Countries, consisting of the Arab majority OPEC, plus Egypt and Syria) announced significant production cuts and an oil embargo aimed at the United States of America and other industrialized countries supporting Israel in the Yom Kippur War. day.

It is worth noting that in 1967, an embargo against the United States was also attempted in response to the Six Day War, but the measure was ineffective. The 1973 embargo, on the contrary, led to a sharp increase in oil prices from $3 to $12 per barrel, which significantly affected world economy. The world experienced a global economic downturn, rising unemployment and inflation, declining stock and bond prices, shifts in the trade balance, etc. Even after the end of the embargo in March 1974, prices continued to rise.

Oil embargo 1973 – 1974 served as a catalyst for the founding of the International Energy Agency, and also prompted many industrialized countries to create national oil reserves.

Thus, OPEC demonstrated its influence in the economic and political arena.

1975 – 1980 Special Fund, OFID

International assistance activities of the Organization of the Petroleum Exporting Countries began long before the oil price spike of 1973–1974. For example, the Kuwait Arabic Foundation economic development has been in operation since 1961.

After 1973, some Arab countries became the largest providers of foreign aid, and OPEC added oil supplies to its goals to promote socioeconomic growth in poorer countries. The OPEC Special Fund was created in Algeria in March 1975 and officially established in January of the following year.

In May 1980, the Fund reclassified itself as an official international development agency and was renamed the Fund international development OPEC (OPEC Fund for International Development, OFID) with permanent observer status at the United Nations.

1975 Hostage taking.

On December 21, 1975, several oil ministers, including the representative of Saudi Arabia and Iran, were taken hostage at the OPEC Conference in Vienna. The attack, which killed three ministers, was carried out by a six-man team led by Venezuelan militant "Carlos the Jackal", who declared their goal to be the liberation of Palestine. Carlos planned to seize the conference by force and ransom all eleven oil ministers present, with the exception of Ahmed Zaki Yamani and Jamshid Amuzegar (representatives of Saudi Arabia and Iran), who were to be executed.

Carlos marked 42 of the 63 hostages on the bus and headed to Tripoli with a stop in Algiers. He initially planned to fly from Tripoli to Baghdad, where Yamani and Amuzegar were to be killed. 30 non-Arab hostages were released in Algeria, and several more in Tripoli. After that, 10 people remained hostage. Carlos had a telephone conversation with Algerian President Houari Boumediene, who informed Carlos that the death of the oil ministers would lead to an attack on the plane.

Boumediene must also have offered Carlos asylum and perhaps financial compensation for failing to complete his assignment. Carlos expressed regret that he could not kill Yamani and Amuzegar, after which he and his accomplices abandoned the plane and fled.

Some time after the attack, Carlos' associates reported that the operation was commanded by Wadi Haddad, the founder Popular Front liberation of Palestine. They also claimed that the idea and funding came from an Arab president, widely believed to be Muammar Gaddafi of Libya (the country is part of OPEC). Other militants, Bassam Abu Sharif and Klein, claimed that Carlos received and kept a ransom of between US$20 and US$50 million from the "Arab President". Carlos claimed that Saudi Arabia paid the ransom on behalf of Iran, but that the money was "diverted in transit and lost in the revolution."

Carlos was only caught in 1994 and is serving a life sentence for at least 16 other murders.

Oil crisis 1979 - 1980, oil surplus 1980

In response to the wave of nationalization of oil reserves and high oil prices in the 1970s. industrialized countries have taken a number of steps to reduce their dependence on OPEC. Especially after prices set new records, approaching $40 per barrel in 1979-1980, when the Iranian revolution and the Iran-Iraq war disrupted regional stability and oil supplies. In particular, energy companies began switching to coal, natural gas and nuclear energy, and governments began devoting multibillion-dollar budgets to research programs to find alternatives to oil. Private companies have begun development large deposits oil in non-OPEC countries in areas such as Siberia, Alaska, the North Sea and the Gulf of Mexico.

By 1986, global oil demand had fallen by 5 million barrels per day, non-member production had increased substantially, and OPEC's market share had fallen from about 50% in 1979 to less than 30% in 1985. As a result, the price of oil fell for six years, culminating in the price halving in 1986.

To combat declining oil revenues, Saudi Arabia in 1982 demanded that OPEC verify compliance with oil production quotas from cartel member countries. When it turned out that other countries did not comply with the requirement, Saudi Arabia reduced own production from 10 million barrels per day in 1979-1981. to 3.3 million barrels per day in 1985. However, when even this measure failed to stop prices from falling, Saudi Arabia changed strategy and flooded the market with cheap oil. As a result, oil prices have fallen below $10 per barrel, and producers with higher production costs are suffering losses. OPEC member countries that did not comply with the previous agreement began to limit production in order to support prices.

1990 – 2003 Overproduction and supply disruptions.

Before the invasion of Kuwait in August 1990, Iraqi President Saddam Hussein pushed the Organization of the Petroleum Exporting Countries to end overproduction and raise oil prices in order to provide financial assistance to OPEC countries and speed up recovery from the 1980–1988 wars in Iran. These two Iraq wars against other OPEC members seriously shook the organization's cohesion, and oil prices began to decline rapidly as a result of supply disruptions. Even the September 2001 al-Qaeda attack on New York skyscrapers and the March 2003 US invasion of Iraq had less of a short-term negative impact on oil prices, as OPEC cooperation resumed during this period.

In the 1990s, two countries left OPEC, having joined in the mid-70s. In 1992, Ecuador withdrew because it refused to pay the annual membership fee of $2 million and also believed that it needed to produce more oil than prescribed by quota restrictions (in 2007 the country rejoined the organization). Gabon suspended membership in January 1995 (also returned in July 2016).

It is worth noting that oil production volumes in Iraq, despite the country’s constant membership in the organization since its founding, were not subject to quota regulation in the period from 1998 to 2016 due to political difficulties.

The decline in demand caused by the Asian financial crisis of 1997–1998 led to a decline in oil prices to 1986 levels. After prices fell to around $10 a barrel, diplomatic negotiations led to production cuts from OPEC countries, Mexico and Norway. After prices fell again in November 2001, OPEC members Norway, Mexico, Russia, Oman and Angola agreed to cut production for 6 months from January 1, 2002. In particular, OPEC reduced production by 1.5 million barrels per day.

In June 2003, the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries held their first joint seminar on energy issues. Since then, meetings of the two organizations have been held on a regular basis.

2003 – 2011 Volatility of the oil market.

In 2003 – 2008 In Iraq, occupied by the United States, there were massive uprisings and sabotages. This has coincided with soaring demand for oil from China and commodity investors, periodic attacks on the Nigerian oil industry and dwindling reserve capacity to protect against potential shortages.

This combination of events caused oil prices to skyrocket to levels far above those previously projected by the organization. Price volatility reached its extreme in 2008, when WTI crude oil rose to a record $147 a barrel in July before falling to $32 a barrel in December. It was the time of the greatest global economic downturn since World War II.

The organization's annual oil export revenue also set a new record in 2008. It was valued at about $1 trillion, and reached similar annual levels in 2011-2014 before falling again. By the start of the 2011 Libyan Civil War and the Arab Spring, OPEC began issuing clear statements to counter "excessive speculation" in oil futures markets, blaming financial speculators for driving up volatility beyond market fundamentals.

In May 2008, Indonesia announced its withdrawal from the organization upon expiration of its membership, explaining its decision by the transition to oil imports and the inability to fulfill the prescribed production quota (in 2016, Indonesia was again part of the organization for a period of several months).

2008 Dispute over production volumes.

The different economic needs of OPEC member countries often lead to internal debates over production quotas. Poorer members pushed for production cuts from other countries in order to raise the price of oil and therefore their own incomes. The proposals run counter to Saudi Arabia's stated long-term strategy of partnering with global economic powers to ensure a stable supply of oil to fuel economic growth. Part of the basis for this policy is Saudi Arabia's concern that excessively expensive oil or unreliable supplies will prompt industrial countries to conserve energy and develop alternative fuels, reducing global oil demand and ultimately leaving reserves in the ground. The Minister of Oil of Saudi Arabia, Yamani, commented on this issue in 1973 with the following words: “ Stone Age ended not because we ran out of stones.”

On September 10, 2008, with oil prices still hovering around $100 a barrel, a production dispute arose at an OPEC meeting. Saudi officials then reportedly walked out of a negotiating session in which other members voted to cut OPEC production. Although Saudi delegates officially approved the new quotas, they anonymously said they would not comply with them. The New York Times quotes one of the delegates as saying: “Saudi Arabia will meet market demand. We will see what the market requires and will not leave the buyer without oil. The policy hasn't changed." A few months later, oil prices fell to $30 and did not return to $100 until civil war in Libya in 2011.

2014–2017 Excess of oil.

During 2014–2015 OPEC member countries have consistently exceeded their production ceilings. At this time, economic growth was slowing in China, and oil production in the United States almost doubled compared to 2008 and approached the levels of world leaders in production volumes - Saudi Arabia and Russia. This leap occurred due to the significant improvement and spread of technology for developing shale oil through “fracking.” These events, in turn, led to lower US oil import requirements (a move closer to energy independence), record levels of global oil reserves, and a fall in oil prices that continued into early 2016.

Despite the global oil glut, on November 27, 2014 in Vienna, Saudi Arabia's Oil Minister Ali al-Naimi blocked calls from poorer OPEC members for production cuts to support prices. Naimi argued that the oil market should be left uninterrupted to allow it to self-balance at lower prices. According to his arguments, OPEC's market share should recover due to the fact that expensive shale oil production in the United States will not be profitable at such low prices.

A year later, at the time of the OPEC meeting in Vienna on December 4, 2015, the organization had exceeded its production ceiling for 18 consecutive months. At the same time, oil production in the United States decreased only slightly compared to its peak. Global markets appeared to be oversupplied by at least 2 million barrels a day, even as the war in Libya cut the country's output by 1 million barrels a day. Oil producers were forced to make major adjustments to maintain prices at $40. Indonesia briefly rejoined the export body, Iraqi production increased after years of turmoil, Iran was poised to restore production if international sanctions were lifted, hundreds of world leaders pledged to limit carbon emissions from fossil fuels as part of the Paris climate agreement, and solar technology became increasingly competitive and widespread. In light of all these market pressures, the organization decided to defer the ineffective production cap until the next ministerial conference in June 2016. By January 20, 2016, the price of the OPEC Oil Basket had fallen to $22.48 per barrel, less than one-fourth of its high since June 2014 ($110.48), and less than one-sixth of its record reached in July 2008 ($140. 73).

In 2016, the oil glut was partially offset by significant production cuts in the US, Canada, Libya, Nigeria and China, and the basket price gradually rose to $40 per barrel. The organization regained a modest percentage of market share, maintained the status quo at its June conference, and approved "prices at levels suitable for both producers and consumers," although many producers were still experiencing severe economic difficulties.

2017–2019 Reduction in production.

In November 2016, OPEC members, tired of declining profits and dwindling financial reserves, finally signed an agreement to cut production and introduce quotas (Libya and Nigeria, devastated by the unrest, were exempt from the agreement). Along with this, several countries outside the organization, including Russia, supported the Organization of Petroleum Exporting Countries in its decision to limit production. This consolidation is called the OPEC+ agreement.

In 2016, Indonesia, instead of agreeing to the requested 5% production cut, again announced a temporary suspension of membership in the organization.

During 2017, oil prices fluctuated around $50 per barrel, and in May 2017, OPEC countries decided to extend production restrictions until March 2018. Renowned oil analyst Daniel Yergin described the relationship between OPEC and shale producers as "a mutual existence where both sides learn to live with prices that are lower than they would like."

In December 2017, Russia and OPEC agreed to extend production cuts of 1.8 million barrels per day until the end of 2018.

On January 1, 2019, Qatar left the organization. According to the New York Times, this is a strategic response to the ongoing boycott of Qatar by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt.

On June 29, 2019, Russia again agreed with Saudi Arabia to extend the initial 2018 production cuts by six to nine months.

In October 2019, Ecuador announced its withdrawal from the organization effective January 1, 2020 due to financial problems.

In December 2019, OPEC and Russia agreed to one of the largest production cuts to date. The agreement will last for the first three months of 2020 and is aimed at preventing an oversupply of oil on the market.

OPEC is an acronym made up of the first letters English phrases The Organization of the Petroleum Exporting Countries (stands for the organization of oil exporting countries). The tasks of OPEC members are to support economically justified and profitable prices for the production and sale of oil, which for many of them is the only export product.

OPEC appeared in 1960, when the colonial system of the world was collapsing and new independent states, mainly African or Asian, began to appear on the international scene. At that time, their mineral resources were mined, among other things, by Western companies, the so-called "seven sisters" Exxon, Royal Dutch Shell, Texaco, Chevron, Mobil, Gulf Oil and British Petroleum , who, of course, received the main profits in this process.

The first states that made up OPEC - Iran, Iraq, Kuwait, Saudi Arabia and Venezuela - decided to control the production and sale of oil themselves. The business turned out to be profitable and soon Qatar (1961), Indonesia and Libya (1962), the United Arab Emirates (1967), and Algeria (1969) joined the five founders. In 1971, 1973 and 1975, Nigeria, Ecuador, and Gabon were added to OPEC members.

OPEC currently consists of 12 countries

• Algeria
• Angola
• Venezuela
• Qatar
• Kuwait
• Libya
• Nigeria
• Saudi Arabia
• Ecuador

OPEC countries control the production of 30 to 40% of world oil

At the same time, Brunei, Great Britain, Indonesia, Mexico, Norway, Oman, and Russia - also not the last countries in the oil production industry - are not included in OPEC.

- OPEC headquarters is located in Vienna
- The highest body is the conference of participating countries, convened every two years
- The price of oil is determined as the arithmetic average of the prices of 12 types produced in the participating countries. This is the so-called "OPEC basket". The types of oil included in it change periodically
- OPEC quotas - regulation and limitation of oil production and export for different countries organizations.

The last quota decision was made in November 2014: the Organization of Petroleum Exporting Countries decided not to reduce production and maintained its official maximum level of 30 million barrels per day, which caused a sharp drop in world prices from 100-90 dollars to 50-60 dollars per day. barrel

Barrel (English barrel - barrel) - a unit of volume. Equal to 42 gallons or 158.988 liters

OPEC (Organization of Petroleum Exporting Countries) was formed in 1961 at a conference in Baghdad.

What is OPEC is an interstate organization that was created by oil-producing countries in order to establish control over oil production in their region, unite the efforts of countries and control oil prices.

Five countries proposed creating such an organization: Venezuela, Saudi Arabia, Kuwait, Iran and Iraq.

This was due to the fact that in the 60s of the 20th century, the process of decolonization began, new independent states began to appear on the world map, and the main world share of oil production was owned by 7 transnational corporations, which established their own rules and at one point significantly reduced purchase prices for oil.

The emerging independent states wanted to independently govern their natural resources and do this only for the benefit of their state and society. Since oil was oversupplied at the time, measures were necessary to prevent a subsequent fall in prices. In this connection, OPEC approved its oil production program and created its own body - the Secretariat, which is currently located in Vienna.

Opinion: OPEC is a consequence of the globalization of the world economy. The desire to concentrate the management of the oil industry in a single block, to unify processes, to ensure an uninterrupted supply of raw materials to developed countries and world factories. It is also a powerful tool for influencing the world economy, Russia, through manipulation of oil production volumes and prices.

Initially, OPEC consisted of 5 founding countries. Subsequently, they were joined by 5 more: the UAE, Qatar, Libya, Indonesia and Algeria. On this moment, 12 countries are represented in OPEC: Venezuela, Saudi Arabia, Kuwait, Iran, Iraq, UAE, Libya, Algeria, Ecuador, Equatorial Guinea, Gabon and Angola.

Indonesia became an oil importer and left OPEC. In 2018, Qatar announced its withdrawal from OPEC. In 2015, Russia was invited to join OPEC, but the Russian Federation refused.

Recently, the price of oil has become an important tool of political influence. The economies of some countries are very dependent on current oil prices and when they fall, they suffer colossal losses.

Some OPEC countries (Nigeria, Angola, Iraq, Kuwait), with large volumes of oil production, have weak economic systems, large external debts and often enter into unjustified military conflicts (for example, the Kuwait invasion of Iraq in 1990). Venezuela had a dictatorship under Hugo Chavez for a long time, which was replaced by his follower Muduro. Therefore, OPEC countries are faced with great difficulties, and even control of 2/3 of world oil reserves does not allow stabilizing the situation in the economy and political sphere.

The opinion is often circulated that OPEC is not a cartel at all, and this organization has long lost real leverage over the price of oil. Meanwhile, market observations in the context of OPEC meetings and decisions show the fallacy of this opinion.

Opinion: OPEC conspiracies to increase oil prices cause negativity in developed countries (shale producers don’t count), the opposite reaction is the growth of alternative energy: wind, sun. The transition to electric vehicles is accelerating. The world is tired of depending on a handful of countries.