OPEC is: Definition, History, Goals & Members
OPEC is: Definition, History, Goals & Members – In this discussion Regarding Knowledge will explain about OPEC. OPEC is an abbreviation for Organization of the Petroleum Exporting Countries. OPEC member countries are countries that export petroleum.
OPEC is: Definition, History, Goals & Members
Apart from reviewing the definition of OPEC, we will also discuss the history, objectives and member countries of OPEC. For more details, see the following explanation.
Understanding OPEC
OPEC is the Organization of Petroleum Exporting Countries, which is an organization whose goal is negotiate issues related to oil production, prices and concession rights with oil companies.
History of OPEC
OPEC was founded on September 14, 1961 in Baghdad, Iraq. The founding countries of OPEC are 5, namely Iraq, Iran, Kuwait, Saudi Arabia and Venezuela. After holding the Baghdad Conference 10-14 August 1960 which was attended by the five oil producing countries.
OPEC's headquarters were initially located in Geneva (21 January 1961-August 1966) then moved to Vienna, Austria. When it was first established, it was agreed that OPEC's aim was to maintain stable international oil prices for the benefit of its member countries.
Venezuela was the country that first initiated the formation of the OPEC organization by approaching Iran, Gabon, Libya, Kuwait and Saudi Arabia in 1949.
Venezuela advised these countries to exchange views and explore broad avenues and more intense communication between oil-producing countries.
On September 10-14 1960, from the idea of Venezuelan Minister of Trade and Energy Juan Pablo Perez Alfonzo and Minister Saudi Arabia Mining and Energy Abdullah Al Tariki, the governments of Iraq, Persia, Kuwait, Saudi Arabia and Venezuela held a meeting in Baghdad to discuss how to increase the price of crude oil produced by each producing country the oil.
OPEC was later founded in Baghdad, initiated by a 1960 law created by American President Dwight Eisenhower who suppressed quotas from Venezuelan and Persian Gulf oil imports such as the Canadian oil industry and Mexico.
The one who reduced the world's oil pressure in this area, Venezuelan President Romulo Betancourt made efforts to form alliance with oil producing Arab countries as a strategy to protect the autonomy and profitability of oil Venezuela.
As a result, OPEC was established to unify and coordinate the policies of member countries as a follow-up to what had been done.
OPEC's goals
OPEC's goal is to maintain oil prices and reject unilateral actions to reduce oil prices The largest oil companies called The Seven Major belong to Exxon, Texaco, Socal, Gulf, British Petroleum, Shell.
The oil giant companies come from developed countries, namely the United States, England, West Germany and Japan. OPEC seeks to jointly determine price policies and the amount of oil production on the world market.
Broadly speaking, OPEC's objectives include:
- Combining the oil policies of member countries
- Meeting world demand for petroleum
- Stabilize world oil prices
- Establish policies to protect member countries
- Maintaining oil prices and rejecting actions to reduce oil prices carried out by large companies such as The Seven Majors such as Exxon, Texaco, Socal, Gulf, British Petroleum, Shell.
OPEC member
Until now, OPEC members have experienced very high development with members from several countries producing and exporting crude oil from various parts of the world.
The important requirements for membership in OPEC include:
- The country concerned is substantially an exporter of crude oil
- Fundamentally it has the same needs as member countries.
- Approved by the majority of OPEC members
Below are the OPEC countries, including the following.
- Saudi Arabia (Founding Country, joined in September 1960)
- Iran (Founding Country, joined in September 1960)
- Iraq (Founding State, joined in September 1960)
- Venezuela (Founding Country, joined in September 1960)
- Algeria (1969)
- Angola (1 January 2007)
- Libya (December 1962)
- Nigeria (July 1971)
- Qatar (December 1961)
- United Arab Emirates (November 1967)
- Ecuador (1973-1993, re-joined since 2007)
In 1973, Gabon in 1973 also joined the OPEC organization with its status becoming associate member of OPEC, but left the organization with full membership of 1975-1995.
In December 1962, Indonesia joined OPEC, but in May 2008 announced that it had submitted a letter to leave OPEC at the end of the year. 2008 considering that Indonesia has become an oil importer (since 2003) or net importer and is unable to meet the production quota that has become decision.
But after holding the meeting, Indonesia was only suspended from OPEC membership, Indonesia re-entered became an official member in 2014 followed by the election of Joko Widodo as President new.
On November 30 2016, Indonesia again left OPEC membership, this is the effect of OPEC policy which reduced Indonesia's oil production by 37,000 barrels per day, to stop the decline in oil prices world.
Thus has been explained about OPEC is: Definition, History, Goals & Members, hopefully it can increase your insight and knowledge. Thank you for visiting and don't forget to read other articles.
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