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OPEC

Organisation of Petroleum Exporting Countries, or OPEC has been in operation since 1965 from its headquarters in Austria. Seen as a cartel, notoriety of this implication, OPEC themselves have tried to distance themselves from, and if we have a look at the members of OPEC you begin to understand why.

Iraq
, Indonesia, Iran, Kuwait, Libya, Angola, Algeria, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela are the members of OPEC and if you look at most of these countries in some way or the other they have been embroiled in civil wars, with the exception of  the UAE, Saudi Arabia and Kuwait. That is not to imply that OPEC had anything to do this but on a more positive note they have stepped in to most of these to regulate the crude oil industry and thus played a major role in the development of the oil and energy sector of these countries.

Sometimes to the world’s detriment. With regulation comes the undertone of monopoly and demand, and when you consider that fossil fuels drive economies, there regulations have influenced the world markets in every aspect. It has caused major inflation in both the developing and developed worlds in the oil weapons crisis of 1973. Since then OPEC’s ability to control oil prices has somewhat diminished, due to the discovery of large oil reserves in the Gulf of Mexico and the North Sea, the opening of Russia and modernization. However OPEC member countries still account for two thirds of the world oil reserves and more or less than 40% of the world’s oil production, giving them a considerable amount of control over the global market.

Up and coming markets to look out for would be Syria, Mexico and Bolivia, as they have been invited to join OPEC. With this kind of organisation in place we can compare them to the Microsoft of the Oil producing nations. Nothing short of the Dons of their trade and in the democratic world that we live in, we have to accept the decisions taken on behalf of the energy producing and consuming world.

OPEC Quotas and Production (in thousands of barrels per day)

COUNTRY

QUOTA
(7/1/05)

PRODUCTION
(1/07)

CAPACITY

Algeria

894

1,360

1,430

Angola

N/A

1,490

1,490

Indonesia

1,451

860

860

Iran

4,110

3,700

3,750

Kuwait

2,247

2,500

2,600

Libya

1,500

1,650

1,700

Nigeria

2,306

2,250

2,250

Qatar

726

810

850

Saudi Arabia

9,099

8,800

10,500

United Arab Emirates

2,444

2,500

2,600

Venezuela

3,223

2,340

2,450

Total

28,000

30,010

32,230

 


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