Organization of the Petroleum Exporting Countries (OPEC)

By | December 20, 2015

The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
Flag of the Organization of Petroleum Exporting Countries
The five Founding Members were later joined by nine other Members. viz.

  1. Qatar (1961);
  2. Indonesia (1962) – suspended its membership from January 2009-December 2015;
  3. Libya (1962);
  4. UAE (1967);
  5. Algeria (1969);
  6. Nigeria (1971);
  7. Ecuador (1973): suspended its membership from December 1992-October 2007;
  8. Angola (2007) and
  9. Gabon (1975): suspended its membership in 1994.

As of December 2015 OPEC has 13 members: six countries in the Middle East (Western Asia), one country in Southeast Asia, four countries in Africa, two countries in South America. Their combined rate of oil production represents approximately 40% of the world’s total production.

OPEC members as of December 2015

Image source: screen shot from Wikipedia

The OPEC Statute stipulates that: “any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members”.

The statue further distinguishes between three categories of membership:

  1. Founder member,
  2. Full member and
  3. Associate member.

Founder members of the OPEC are those countries which were represented at OPEC’s first Conference, held in Baghdad, Iraq, in September 1960 and which signed the original agreement establishing OPEC.

Full members are the Founder members, plus those countries whose applications for Membership have been accepted by the Conference.

Associate members are the countries which do not qualify for full membership, but which are nevertheless admitted under such special conditions as may be prescribed by the Conference.

The secretariat was originally established in Geneva, Switzerland in 1961. it moved to Vienna, Austria, in 1965. the 8th (Extraordinary) OPEC Conference approved the Host agreement with Austrian Government in April 1965, prior to the opening of the Secretariat in Vienna on September 1, 1965.

OPEC member countries produce about 42% of the world’s crude oil and 18% of its natural gas. However, OPEC’s crude oil exports represent about 58% of the crude oil traded internationally. Therefore, OPEC can have a strong influence on the oil market, especially if it decides to decrease or increase its production level.

At the end of the year 2009, world proven crude oil reserves stood at 1,337,200 million barrels, of which 1,064,288 million barrels, or 79.6 percent was in OPEC member countries.

he countries with the world’s largest proven crude oil reserves (in million barrels) are Saudi Arabia (264,590), Venezuela (211,173), Iran (137,010), Iraq (115,000) and Kuwait (101,500) all figures are bin million barrels.

The countries with most crude oil production are Russia (9,650,000), Saudi Arabia (8,184,000),  USA(5,310,000), China (3,793,000) and Iran (3,557,000) all figures are barrels per day..