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Gwes Group

OPEC is an organization of 13 oil producing countries that was established in 1960 to coordinate petroleum policies and stabilize oil prices globally. It aims to manage oil supply to avoid fluctuations that could impact member and purchasing economies. While it promotes cooperation and some market influence, it is criticized for incentivizing high prices for members' benefit.

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Shruti Tadka
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37 views8 pages

Gwes Group

OPEC is an organization of 13 oil producing countries that was established in 1960 to coordinate petroleum policies and stabilize oil prices globally. It aims to manage oil supply to avoid fluctuations that could impact member and purchasing economies. While it promotes cooperation and some market influence, it is criticized for incentivizing high prices for members' benefit.

Uploaded by

Shruti Tadka
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© © All Rights Reserved
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Sinhgad 

Technical Educational Society's


SMT. Kashibai Navale College of Engineering ,
Department Of Management Studies,
Vadgaon Bk.Campus, Pune.

Presentation on,
 Organization of the Petroleum Exporting Countries (OPEC)

By:
Siddhant Ajit Kale
Divya S Chippa
Shrutika L Tadka
Class: MBA I (2021-2023)
Roll No. : 33
Subject: GWES
Guide: Dr. Sanket Charkha
What Is the Organization of the Petroleum
Exporting Countries (OPEC)?

• The term Organization of the Petroleum Exporting Countries (OPEC)


refers to a group of 13 of the world’s major oil-exporting nations. OPEC
was founded in 1960 to coordinate the petroleum policies of its
members and to provide member states with technical and economic
aid.
• OPEC is a cartel that aims to manage the supply of oil in an effort to set
the price of oil on the world market, in order to avoid fluctuations that
might affect the economies of both producing and purchasing countries.
• Countries that belong to OPEC include Iran, Iraq, Kuwait, Saudi Arabia,
and Venezuela (the five founders), plus Algeria, Angola, Congo,
Equatorial Guinea, Gabon, Libya, Nigeria, and the United Arab Emirates.
Understanding
OPEC:
• OPEC, which describes itself as a permanent
intergovernmental organization, was created
in Baghdad in September 1960 by founding
members Iran, Iraq, Kuwait, Saudi Arabia, and
Venezuela.
• The headquarters of the organization are in
Vienna, Austria, where the OPEC Secretariat,
the executive organ, carries out OPEC’s day-
to-day business.
• According to its statutes, OPEC membership
is open to any country that is a substantial
exporter of oil and shares the ideals of the
organization. After the five founding
members, OPEC added 11 additional member
countries as of 2019. 
OPEC's Mission:
• According to the OPEC website, the group's
mission 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.
• The organization is committed to finding ways to
ensure that oil prices are stabilized in the
international market without any major
fluctuations. 
• Membership to OPEC is only granted after
receiving a vote from at least three-quarters of its
full members. Associate memberships are also
granted to countries under special conditions.
Special Considerations:

• Oil prices and OPEC's role in the international petroleum market are
subject to a number of different factors. The advent of new technology,
especially fracking in the United States, has had a major effect on
worldwide oil prices and has lessened OPEC’s influence on the markets. 
• OPEC decided to maintain high production levels and consequently low
prices as of mid-2016, in an attempt to push higher-cost producers out
of the market and regain market share. 
• However, starting in January 2019, OPEC reduced output by 1.2 million
barrels a day for six months due to a concern that an economic
slowdown would create a supply glut, extending the agreement for an
additional nine months in July 2019.
Advantages and Disadvantages of OPEC:

• There are several advantages of having a cartel like OPEC operating in the crude oil
industry. First, it promotes cooperation among member nations, helping them alleviate
some degree of political hostilities.
•  And because the organization's main goal is to stabilize oil production and prices, it is
able to exert some influence over production from other nations.
• OPEC’s influence on the market has been widely criticized. Because its member
countries hold the vast majority of crude oil reserves (80.4%, according to the OPEC
website), the organization has considerable power in these markets.
• As a cartel, OPEC members have a strong incentive to keep oil prices as
high as possible while maintaining their shares of the global market.
• s a cartel, OPEC members have a strong incentive to keep oil prices as high
as possible while maintaining their shares of the global market.
 Bottom Line:

• OPEC is an organization that controls petroleum production, supplies,


and prices in the global market.
• The group was established in 1960 and is made up of 13 different oil-
producing companies.
• It holds considerable influence in the marketplace and is often criticized
for inflating oil prices to the benefit of its members.
• But it isn't immune to challenges, notably geopolitical tensions,
oversupply and drops in demand, and the adoption of new, green
technologies.
THANK YOU.

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