Sources Belousova Annahttp://www.opec.org/opec_web/en/ Chuhareva Elenahttp://articles.economictimes.indiatimes.com/keyword/opec Sinelnikova Allahttp://www.eia.gov/ IFF 3-1ttp://www.valuewalk.com/ The Organization of the Petroleum Exporting Countries
What is OPEC?• the Organization of the Petroleum Exporting Countries• an intergovernmental organization of twelve oil-producing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuw ait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates• executive organ – the Secreteriat• Secretary General - Abdalla el-Badri• policy decisions are taken by consensus at its Vienna headquarters• the OPEC Statute distinguishes between the Founder Members and Full Members - those countries whose applications for membership have been accepted by the Conference
OFID• OPEC Fund for International Development• resources consist mainly of voluntary contributions by OPEC MCs and income derived from OFID’s investments and loans (interest and service charges)• LDCs and other low-income countries are accorded priority• Promotion of South-South solidarity• 3 regular grant programs:Technical Assistance, Research andSimilar Activities,Emergency Relief Aid
The goals of OPEC• OPEC was formed to administer a common policy for the sale of petroleum (dictionary definition)• 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 of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry (according to the OPEC Statute)
History• 1960 - Baghdad Conference• 1965 – headquarters move to Vienna• 1968 - Declaratory Statement of Petroleum Policy in Member Countries’ in• 1973 – Arab Oil embargo• 1976 – OFID• 1980-ies – oil glut• 1986 – oil glut peak• 1990-91 Gulf War
Forecast Based on projections from the EIA May 2012 Short-Term Energy Outlook (STEO), members of the Organization of the Petroleum Exporting Countries (OPEC) could earn an estimated $1,154 billion of net oil exportThe U.S. Energy revenues in 2012 and $1,117 billion in 2013. Last year, OPEC earnedInformation $1,026 billion in net oil export revenues, a 33 percent increase from 2010.Administration (EIA) Saudi Arabia earned the largest share of these earnings, $311http://www.eia.gov/ billion, representing 30 percent of total OPEC revenues.
OPEC today• increased production has led to an over supply of crude oil in the world market, also boosted by increased production from non-OPEC members (Russia, Canada)• political tensions caused by Western sanctions against Iran• markets also remain shaken by worries about the eurozone after elections in Greece and France, and debt crisis as such• Chinese growth is less than predicted (8.2%<8.5%)• long-seated problems: civil strife in Nigeria, civil war in Libya, corruption in Angola• weak economic performance in developed nations
Conclusion1. Is the goal of OPEC creation reached?OPEC can provide the market with the oil it needs and it is doing that quite efficiently. But there is little it can do in terms of price control which are driven high by speculators.
Conclusion2. What are the obstacles to efficient functioning?Political disputes among the members of OPEC, inner problems of many members (civil wars, etc.) instability
Conclusion • 3. Advantages & disadvantagesAdvantages Disadvantages• Economic: • Political: • Oil supply and • Inner prices (to lesser disagreements extent) control • Interdependance • Enables economic with Asia (i.g. growth China) and Western • Ensures market countries (US, EU) stability