OPEC. Petroleum exporting countries

ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC), Formation and membership:

The Organization of Petroleum Exporting Countries (OPEC) was formed in 1960 in Baghdad (Iraq) by five main oil exporting countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

The formation of (OPEC) was essentially a reaction to the exploitative tendencies of multinational companies involved in oil exploration.

As a result of the success of this organization in maintaining oil price stability and uniformity of policies, eight other countries were attracted to join the body. This brings the total membership of the organization to thirteen (13).

The other eight countries that joined later were Qatar (1961) Indonesia (1962), Libya (1962), United Arab Emirate (1973), Algeria (1969), Nigeria (1971), Gabon (1973) and Ecuador (1973).

The organization’s secretariat is in Vienna, Austria.

Aims and Objectives of OPEC

• To maintain stability of oil price: One of the main objectives of OPEC is to maintain the stability of oil price in the world market.
• To ensure steady supply of oil: The organization also ensures that there is a regular and steady supply of oil to the world market.
•  Encouragement of exploration and development of petroleum resources: OPEC equally ensures that member countries are encouraged in the exploration, exploitation and development of petroleum resources.

 Stabilization of oil income: The organization was set up to ensure the stabilization of oil income of its member- nations.

Coordination of petroleum policies: OPEC is set also to ensure the coordination of petroleum policies of its member countries and to improve their bargaining power. Allocation of production quota: It fixes and allocates production quota to member nations.

•  To increase its control over the oil industry: OPEC is also set to make sure that it increases its control over the industry in the world.

Achievements of the Organization of Petroleum Exporting Countries (OPE)

• Establishment of a common fund: This fund has helped to alleviate the financial problems of the members at one or the other.
• Formation of the common forum: an organization created a forum wt problems confronting the

           met states of OPEC can be resed amicably.

 Regulation of production: organization, to a large extent, succeeded in allocating

production quotas to member-states.

 Regulation of prices: it has succeeded in ensuring that crude oil is regulated and stable

 Encouragement of oil exploration Member-states of the organization have been encouraged to participate in exploration.

Control of multinational company The organization has also sue to control the activities of me companies.

 Global policies: OPEC is reckoned with in global politics. Oil is a good manipulative weapon in international politics.

Problems or failure of the Organization of Petroleum Exporting Countries(OPEC)

Rivalry in leadership: The rivalry in the leadership of the organization between Saudi Arabia and ha problem facing OPEC.

Entry of non-OPEC members into the oil industry: The emergence of another international oil market in the 1980s, especially of the North Sea oil producers: the UK, Norway and Mexico, has reduced OPEC’s influence.

Decline of loyalty of member- nations: There is constant disagreement among members of OPEC in the fixing of prices and production quotas, and failure implements agreed prices and production quotas.

Stockpiling of oil by advanced nations: The activities of the advanced nation in stockpiling oil, which contributes to the fall of oil prices are causing problems for OPEC.

Fall in prices of oil: The world economic depression brings about a fall in oil prices.

Political disagreement: There have been some political disagreements between member countries e.g. Iran and Iraq, Iraq and Kuwait. These are serious problems for the organization. Research for oil substitutes by advanced countries: There is increasing research by advanced countries to find a substitute for oil.

Solutions or remedies to the Organization of Petroleum Exporting Countries (OPEC) problems

Imposition of penalties: Penalties or fines have been imposed on member- nations that go against the rules and regulations of the body.

Joint research: Members of the organization have embarked on joint research to counteract that of the Western and advanced nation to find a substitute for oil.

 Strengthening of unity among its members: The organization is making efforts to create unity among its members.

•  Fixing of production quota: The organization has enforced its rules to make sure that member-nation adhere to their production quotas.
•  Rotation of leadership position: The key posts in the organization are being rotated among the member-nations.
•  Maintenance of a reasonable oil price: OPEC has also tried to maintain a reasonable oil price in order to avoid price fluctuation.

Reasons for the Continued Existence of the Organization of Petroleum Exporting Countries (OPEC)

• To protect the interest of its members.
• It has helped in the stabilization of world oil prices, thereby preventing wide fluctuations in oil prices and output.
• It has been responsible for seeking favourable markets for oil produced by it members.
• The existence of OPEC has led to improved trade relations among members and the international community as a whole.

• OPEC provides employment for many people especially from the member- nations.
• OPEC helps to educate its members and the international community through its regular meetings where issues are thoroughly discussed and communique issued.

PROTOZOAN DISEASES
155. TRYPONOSOMIASIS

1. loans for businesses
2. economic tools for nation building

Originally posted 2025-01-18 18:32:33.