OPEC, which is an acronym for Organization Of Petroleum Exporting Countries, is a cartel that controls the supply of oil in an effort to control market share, and set the price of oil on the global market.
Organization of the Petroleum Exporting Countries
|•||Secretary General||Abdallah Salem el-Badri|
|•||Statute||10–14 September 1960|
|•||In effect||January 1961|
5,312,590 sq mi
|Currency||Indexed as USD-per-barrel (US$ /bbl)|
Organization of the Petroleum Exporting Countries (OPEC, // OH-pek) is an intergovernmental organization of 13 petroleum-exporting nations, founded in 1960 by the first five members, and headquartered since 1965 in Vienna, Austria. The 13 countries account for 40% of global oil production and 73% of the world's "proven" oil reserves, making OPEC a major influence on global oil prices.
OPEC's stated mission 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 of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry." As of 2016, OPEC's members are Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia (the de facto leader), United Arab Emirates, and Venezuela. Two-thirds of OPEC's oil production and reserves are in its six Middle Eastern countries that surround the oil-rich Persian Gulf.
The formation of OPEC marked a turning point toward national sovereignty over natural resources, and OPEC decisions have come to play a prominent role in the global oil market and international relations. The effect can be particularly strong when wars or insurrections lead to extended interruptions in supply. In the 1970s, restrictions in oil production led to a dramatic rise in oil prices and OPEC revenue and wealth, with long-lasting and far-reaching consequences for the global economy. In the 1980s, OPEC started setting production targets for its member nations; and generally when the production targets are reduced, oil prices increase. In December 2014, "OPEC and the oil men" ranked as #3 on Lloyd's list of "the top 100 most influential people in the shipping industry" – although their influence on international trade is periodically challenged by the expansion of non-OPEC energy sources, and by the recurring temptation for individual OPEC members to exceed their production ceilings.