OPEC was formed in 1960 and currently has 11 member countries that produce around 40% of the world's crude oil. The main objectives of OPEC are to stabilize oil prices in international markets and secure steady income for member nations. A key issue discussed is the recent drop in crude oil prices due to increased US production, as OPEC members have decided not to cut their own production in response. The document examines OPEC members' production shares and export patterns, as well as common transportation routes for crude oil supply.

1. Atul Raj
Harsh Shah
Rakesh Pandey
OPEC Crude Policy

2. • Price Drop Effect
• Importers of OPEC oil
• Pipelines Route
• Summary
• Introduction to OPEC
• Objectives of OPEC
• Members’ Share in Production
• Past Oil Embargo
Overview
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3. • Formed in 1960 to unify policy of Petroleum
exporting countries.
• 11 members produce about 40% of world’s crude oil,
and hence influences the market greatly.
• It has more than 2/3rd of world’s crude oil resource.
Introduction to OPEC
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4. • The main objective of OPEC is to ensure the “stabilization of oil prices
in international markets”
• To secure a steady income to oil producing nations.
• To fulfil the demands of Oil in non-producing countries.
Policy Of OPEC
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5. Algeria, 1130, 4%
Angola, 1777, 6%
Ecuador, 553, 2%
Iran, 2754, 9%
Iraq, 3353, 11%
Kuwait, 2777, 9%
Libya, 343, 1%
Nigeria, 1940, 7%Qatar, 680, 2%
Saudi Arabia, 9683, 32%
UAE, 2841, 9%
Venezuela, 2321, 8%
Share of Members
Fig 1: Production Data of OPEC in Jan’15 ( ‘000 bbl/day) 5

6. • (n.) Prohibition of the trade of
petroleum from one country to
another.
• Past embargoes due to war in
Syria and Israel.
• Gulf War also lead to embargo.
Oil Embargo in Past
Fig 2: Price Change of Crude 6

7. • Due to increase in US oil production, Crude oil
prices have fallen
• OPEC members have decided not to cut their
production even when the price is low.
• A butterfly effect causes the whole equilibrium
to shift.
Price Drop Effect
Fig 3: Fall of Crude oil price in 14-15 7

8. Importer of OPEC Crude
Fig 4: Export by Saudi Arabia Fig 5: Export by Iraq 8

9. Transport: The framework of Crude supply
• Strait of Hormuz & Suez Canal
is a critical point for oil supply.
• Pipelines have total length of
1,942,669 km (2010)
• Saudi Arabia uses Redundancy
by maintaining extra pipeline
structure for security purpose.
Fig 6: Common Transport Route 9

10. • Crude Oil is the major source of Energy all around the globe and new
prospects are opening up with improving technology.
• OPEC has been largely dictating pricing of crude up to now, but we
are expecting this to stop soon.
• Falling oil price could delay investment in alternate ‘greener’ forms of
energy
Summary
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11. • http://www.opec.org/opec_web/en/data_graphs/330.htm
• http://wtrg.com/opecshare.html
• http://marketshareanalysis.blogspot.in/2010/08/market-share-
within-opec.html
• OPEC Annual Statistical Bulletin 2014
• OPEC Monthly Oil Market Report – February 2015
Bibliography
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