The contents of this presentation include; OPEC HEADQUARTERS, FLAG, AND CURRENT SECRETARY ESTABLISHMENT WHY OPEC WAS ESTABLISHED MEMBERSHIPS SAUDI ARABIA NIGERIA VENEZUELA MISSION HISTORY 1973 OIL EMBARGO ROLE OF OPEC INFLUENCE OF OPEC ON GLOBAL OIL MARKET

2. • OPEC
• HEADQUARTERS,FLAG AND CURRENT
SECRETARY
• ESTABLISHMENT
• WHY OPEC WAS ESTABLISHED
• MEMBERSHIPS
• SAUDI ARABIA
• NIGERIA
• VENEZUELA
• MISSION
• HISTORY
• 1973 OIL EMBARGO
• ROLE OF OPEC
• INFLUENCE OF OPEC ON GLOBAL OIL MARKET

3. • OPEC, in full Organization of the Petroleum Exporting
Countries, multinational organization that was established to
coordinate the petroleum policies of its members and to provide
member states with technical and economic aid.
• It is a permanent, intergovernmental Organization, created at
the Baghdad Conference on September 10–14, 1960, by Iran,
Iraq, Kuwait, Saudi Arabia and Venezuela.
• OPEC decisions have come to play a prominent role in the
global oil market and international relations.

4. • OPEC spare capacity "provides an indicator of the world
oil market's ability to respond to potential crises that
reduce oil supplies.
• Aim to regulate the amount of oil that member nations
produce and to keep prices at a steady rate.

5. • OPEC’s headquarters, first located
in Geneva, was moved to Vienna in
1965.
• Austria
• Abdullah Salem el-Badri, the Secretary General of OPEC
since 2007-2016
• Mohammad Barkindo is the current Secretary General

6. • In 1949, Venezuela and Iran took the earliest steps in the
direction of OPEC, by inviting Iraq, Kuwait and Saudi Arabia
to improve communication among petroleum- exporting
nations as the world recovered from World War II.
• The US was simultaneously the world's largest producer
and consumer of oil; and the world market was dominated
by a group of multinational companies known as the
"Seven Sisters", five of which were headquartered in the
US.
• Oil- exporting countries were eventually motivated to form
OPEC as a counterweight to this concentration of political
and economic power.

7. • The creation of OPEC was in1960, in response to the
control exerted by multinational companies on the oil
business at the expense of producing countries.
• By mid 20th century oil prices, production volumes and
other key aspects were controlled by seven large
international companies known as the “Seven Sisters”,
according to their interests and the political and military
situation of these companies’ countries of origin.
• Another reason that led to the creation of OPEC was a
great vacuum in the world’s oil market management, the
inability of the Seven Sisters.

8. • The five Founding Members were later joined by: Qatar
(1961) – terminated its membership in January 2019.
• Indonesia (1962) – suspended its membership in January
2009, reactivated it in January 2016, but decided to
suspend it again in November 2016.
• Libya (1962)
• United Arab Emirates (1967)
• Algeria (1969)

9. • Nigeria (1971)
• Ecuador (1973) – suspended its membership
in December 1992, reactivated it in October
2007, but decided to withdraw its membership effective 1
January 2020
• Angola (2007)
• Gabon (1975) - terminated its membership in January
1995 but rejoined in July 2016
• Equatorial Guinea (2017)
• Congo (2018)

10. The current OPEC members are the following:
• Algeria, Angola, Equatorial
Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria
, the Republic of the Congo, Saudi
Arabia (the De facto leader), the United Arab
Emirates and Venezuela
Former OPEC members are;
• Ecuador, Indonesia and Qatar

12. Saudi Arabia;
• Saudi Arabia is the largest oil exporter in the world and
largest oil producer of the OPEC nations. It has the
greatest spare capacity at about 1.5 million barrels per
day to 2 million barrels per day.

13. • Saudi Aramco, (formerly Arabian-American Oil
Company) is the Saudi Arabian national oil company.
• World’s largest company in 2010. With total assets at
about US$30 trillion.
• It has both the world's largest proven crude oil reserves,
at more than 260 billion barrels and

14. • In November 2013 Venezuela produced 2.69 million
barrels per day.
• In 2014 the production fell to 2.47 million barrels per day.
• In 2014 96 per cent of Venezuela's dollar earnings came
from its oil exports.
• Nigeria;
• Nigeria is the largest producer of sweet oil in OPEC
• Largest exporter of crude oil in Africa.

15. OPEC’s influenced on the market because its
member countries hold the vast majority of crude
oil reserves (about 80%) and nearly half of natural
gas reserves in the world.

16. The stated mission of the organization is to;
• Coordinate and unify the petroleum policies of its
member countries
• 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
• fair return on capital for those investing in the
petroleum industry

17. (1960)
• OPEC managed to prevent price reductions, but its
success encouraged increases in production, resulting in
a gradual decline in nominal prices.
• It adopted a ‘Declaratory Statement of Petroleum Policy
in Member Countries’ in 1968.
(1970)
• Complete sovereignty over petroleum resources.
• Oil prices rose steeply.
• In 1976, OPEC Fund for International Development

18. • Rise in oil prices from $3 per barrel to $12.
• Gas rationing.
The Oil Embargo of 1973 had a lasting effect on the United
States.
• Recommended citizens to reduce their speed for the
sake of conservation, and later.
• Daylight saving time.
• Fuel efficient cars were
manufactured
Global economic recession.
summer time (United Kingdom, European
Union, and others), is the practice of
advancing clocks during warmer months so
that darkness falls later each day
according to the clock.

20. • Prices began to weaken; dropped to $10 per barrel.
• Iran-Iraq war. Saudi Arabia stopped defending the price
of oil, instead concentrated on defending its market
share.
• Persian-Gulf war, Iraq invades Kuwait. No stabilization
on prices and disruption in international market began to
rise.

21. • Members reunited.
• Oil prices began to increase.
• Greater regionalism, globalization, the communications
revolution and other high-tech trends.
(2000)
• Oil was used increasingly as an asset class. Prices
soared till 2008.
• International efforts to reduce the burning of fossil fuels,
sustainable development; a long-term strategy in 2005.

22. • The member states control the OPEC.
• Saudi Arabia’s crude oil reserves and production
capacity dwarf the other members, it has significant
influence over OPEC policy.
• OPEC members have a strong incentive to keep oil
prices as high as possible, while maintaining their shares
of the global market.
• OPEC controls only about 30% of the worlds production,
so their ability to set oil prices by limiting their output has
been lost since other countries outside of OPEC can
raise production.

23. • OPEC is essentially a cartel of major oil producing
nations.
• They deliberate on prices to sell their crude oil
depending on the quality, capacity of each member-
nation's production and of course, the market.
• The US gets most of their oil from these folks.
• There are also intra-politics happening within the nations
in the organization.

24. • Production capacity dictates the level of influence within
the organization.
• Most of the time the Middle East controls decisions but
the smaller nations still benefit in some manner.

25. • In the short term;
the Organization of Petroleum-Exporting Countries
(OPEC) has significant influence on the price of oil.
In the long term ;
its ability to influence the price of oil is quite limited,
primarily because individual countries have different
incentives than OPEC as a whole.