OPEC

OPEC or Organization of the Petroleum Exporting Countries is a group that coordinates and brings together all of the petroleum policies of all the members of its organization to create stability in the oil market. This is to ensure that the petroleum supply to consumers is efficient and economically available. This helps investors in petroleum get a good return and capital on their investment in the industry. OPEC was established at a conference in Baghdad in mid September 1960 by Venezuela, Saudi Arabia, Kuwait, Iraq, and Iran. Every year after more and more countries joined the organization, in 1961, Qatar, 1962 Indonesia but were suspended in 2009, 1963 Libya, 1967 United Arab Emirates, 1969 Algeria, 1971, Nigeria, 1973 Ecuador, 2007 Angola, and from 1975 – 1994 Gabon was a part of the organization.

OPEC headquarters were in Geneva, Switzerland but in 1965, they moved it to Vienna, Austria. When OPEC was formed in 1960 there were seven major companies that controlled the oil. Anglo Persian Oil Company, which is in the United Kingdom became British Petroleum and then the shorter BP around 2000. Also is the United Kingdom is the company Royal Dutch Shell. Chevron now owns three of the companies that were Standard Oil of California, Texaco, and Gulf Oil but BP bought some of the smaller parts. And Standard Oil of New Jersey and Standard Co. of New York is now owned by ExxonMobil. Before the OPEC, these companies dominated the market for oil.

The OPEC has a policy statement that says that all countries have to right to authority over their resources, which gives each country in its organization the rights to their oil and how it is used. This also means that they are don’t abide by competition law, which would make oil more affordable. Since it’s establishment, gas prices really haven’t changed that much besides a couple flukes that made the prices okay. The price of gas has a big effect on the OPEC, since they are depended on gas sales, if prices continue to rise and less people drive, they will lose money. This happened in the 80’s when price rose, which created a demand for it and when the price fell, oil companies in the OPEC saw a lose because they cut production to boost sales. So if you see gas at a reasonable price, remember that the OPEC, will probably jack up the price so they can make more money.