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  • OPEC

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    SAURAV KUMAR VERMA
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    OPEC is an intergovernmental organization of 13 oil-exporting countries founded in 1960 to coordinate and unify petroleum policies among its members and ensure stable oil prices and supplies globally. It is headquartered in Vienna, Austria. OPEC aims to manage the supply of oil in international markets to set the price of oil and ensure fair returns on investments. While OPEC coordinates oil policies, its members have faced conflicts over production levels and national interests at times. OPEC remains an influential player in global oil markets despite facing challenges from environmental concerns and shifting energy demands.

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    Organization of the Petroleum Exporting Countries

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    OPEC is an intergovernmental organization of 13 oil-exporting countries founded in 1960 to coordinate and unify petroleum policies among its members and ensure stable oil prices and supplies globally. It is headquartered in Vienna, Austria. OPEC aims to manage the supply of oil in international markets to set the price of oil and ensure fair returns on investments. While OPEC coordinates oil policies, its members have faced conflicts over production levels and national interests at times. OPEC remains an influential player in global oil markets despite facing challenges from environmental concerns and shifting energy demands.

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    28 views20 pages

    OPEC

    Uploaded by

    SAURAV KUMAR VERMA
    OPEC is an intergovernmental organization of 13 oil-exporting countries founded in 1960 to coordinate and unify petroleum policies among its members and ensure stable oil prices and supplies globally. It is headquartered in Vienna, Austria. OPEC aims to manage the supply of oil in international markets to set the price of oil and ensure fair returns on investments. While OPEC coordinates oil policies, its members have faced conflicts over production levels and national interests at times. OPEC remains an influential player in global oil markets despite facing challenges from environmental concerns and shifting energy demands.

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    of 20

    OPEC

    BY,
    SAMRUDDHI PATANKAR-26
    VAISHNAVI PANDE-24
    AKSHAY TRIBHAN-29
    OMKAR KAMTHE-15
    ANSHUMAN BELSARE-5
    NIKITA NEVASE-23
    About OPEC (The Organization of
    Petroleum Exporting Countries)
     Founded on September the 14th 1960
     Established at Baghdad
     Initially Founded by 5 countries ( Venezuela, Saudi Arabia, Iran, Iraq
    and Kuwait). Currently there are 13 members(Founding Members+
    Libya, UAE, Algeria, Nigeria, Gabon, Angola, Equatorial Guinea,
    Republic of the Congo)
     OPEC is Headquartered in Vienna, Austria.
     OPEC members strongly prefer to describe their organization as a
    modest force for market stabilization rather than a powerful anti OPEC headquarter Vienna, Austria
    competitive cartel.
    Prelude

     In the early 1950s oil was marketed by the “seven sisters” Headquatered in US by breakup of John D
    Rockefeller’s Standard Oil.
     Oil was controlled by Anglo Iranian oil company , Shell, Standard oil of California, Gulf oil, Texaco,
    Standard Oil of New Jersey(Esso) and Standard Oil of New York.
     The need of OPEC formation aroused to counterweight the political and economic power of oil
    importing nations.
     In Feb 1959, as new supplies were becoming available the multinational oil companies unilaterally
    reduced their posted price for Venezuelan and Middle Eastern oil by 10%.
     Which lead to Arab League’s first Arab Petroleum Congress convened in Cairo Egypt.
     In 1960 the founding five members Saudi Arabia, Kuwait, Venezuela, Iraq and Iran met in Bagdad
    during 10-14 Sept.
     OPEC was Formed by Saudi Arabia to secure oil prices despite strong US opposition.
     The Middle Eastern members originally called for OPEC headquarters to be in Baghdad or Beirut
    but Venezuela argued for a neutral location and so the organization chooses Geneva, Switzerland.
     On 1 September 1965 OPEC moved to Vienna, Austria after Switzerland declined to extend
    diplomatic privileges.
    OPEC Members

    The Current members of OPEC


     Iran (1960), Iraq (1960), Saudi Arabia (1960), Venezuela (1960), Kuwait (1960), Qatar (1961), Indonesia (1962), Libya
    (1962), UAE (1967),Algeria (1969), Nigeria (1969), Ecuador (1973), Gabon (1975), Angola (2007), Equatorial Guinea
    (2017), and the Republic of Congo (2018).
     Ecuador Suspended its membership in December 1962 and re-joined OPEC in Oct 2007 but decided to withdraw its
    membership of OPEC effective of 1 Jan 2020.
     Indonesia suspended its membership in Jan 2009 and reactivated it again in Jan 2016 but decided to suspend its
    membership once more at the 171th meeting on OPEC conference on Nov 2016.
     Gabon terminated its membership in Jan 1995 however it re-joined the organization in July 2016.
     Qatar terminated in Membership on 1 Jan 2019.
    Mission and Principle aim of
    OPEC

     The mission of OPEC is to coordinate and unify the petroleum policies of its Member Countries and
    ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply to
    Petroleum consumers, a steady income to procedures, and a fair return on capital for those investing in
    the petroleum industry.

     The coordination and unification of the petroleum policies of member countries and the determination
    of the best means for safe guarding their interests individually and collectively.
    OPEC fund for international
    development

     Supporting rural development in Ghana


     OPEC fund joins ACG pledge
     OPEC fund approves 500 million US$ in global development
     Promoting sustainable development in Africa
    Influence and impact of OPEC
    in the global oil markets

     OPEC member states produce about 40% of the world’s oil, and their exports make up around
    60% of global petroleum trade.
     Control Of Oil Supply
     Stabilization of prices
     Influence on non OPEC countries
     Impact On global Economy
     Impact on energy transition
    Conflicts

     Global economic systems


     Social unrest(Arab Spring, Islamic Revolution, Protest)
     Competition from non-OPEC countries
     Differences in national interests
     Volatility in oil prices
    Conflicts

     Differences in production levels


     Price Hawke vs price doves
     Conflicts with other oil-producing countries
     Political differences
     Environmental concerns
    Achievements of OPEC

     Secure and steady supply of oil and gas


     Singular strategic value to Economic progress
     Sustainable development
     OPEC and the environment
     Strengthening of national oil companies of member countries
    OPEC Today

     OPEC Decided to trim 1million barrels per day as a new quota agreement at OPEC conference in Nov
    2016.
     Qatar announced to withdraw from OPEC effective Jan 1 2019 as strategic response to Qatar diplomatic
    crises.
     In Dec2017 Russia and OPEC agreed to extend production cut of 1.8million barrels per day until end of
    2018.
     On 29 June 2019, Russia agreed to extend 6-9months the original production cut.
     In Oct2019 subsequently Ecuador announced to withdraw from OPEC on 1 Jan 2020.
     In Oct 2022 OPEC Plus led by Saudi Arabia announced a large cut to its Oil production
    Oil output target which angered USA and aided Russia during Russia Ukraine war.
     In early march of 2020 OPEC officials presented an ultimatum to Russia to production
    cut 1.5% of the world supply.
     Another weakening factor for OPEC was Global demand from covid19 pandemic.
    OPEC Plus

     A number of non OPEC member countries also Participate in the organizations


    initiative such as voluntary supply cuts in order to further bind policy objectives
    between OPEC and non OPEC members.

    OPEC PLUS Members


     Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, The
    Philippines , Russia, South Sudan And Sudan.
     Observers of OPEC+ includes Egypt, Norway.
    Future Challenges

     Shifting demand for oil.


     Climate change and environmental regulations.
     Human error
     Political instability
     New market players : the rise of new market
     Lack of agreement among new countries.
     Transparency And trust.
    Conclusion

     OPEC will control the supply and price of global oil.


     OPEC will deal with its terms but not on petrodollars.
     Is OPEC relevant in the next 10-15 years? (considering EVs and the shift in renewable
    electricity products)
     Can OPEC be the reason for world war 3?
     OPEC may cause a decline in the US economy.
     Internal politics and economic conflicts within OPEC members could prevent
    meaningful agreement for long-term unified policy.
    Thank You

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