OPEC (Organization of Petroleum Exporting Countries)

Organization of Petroleum Exporting Countries

Organization of Petroleum Exporting Countries (OPEC), multinational organization (est. 1960, formally constituted 1961) that coordinates petroleum policies and economic aid among oil-producing nations. Its Board of Governors and board chairperson are elected by member nations; OPEC's headquarters are in Vienna, Austria. Members consist of Algeria, Angola, Ecuador (membership suspended 1992–2007), Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Indonesia was a member but suspended its membership in 2008. Saudi Arabia has traditionally dominated the organization, owing to its enormous oil reserves; the organization's members produce about 40% of the world's crude oil.

In 1973, as a result of the Arab oil embargo against Western nations who supported Israel during the Yom Kippur War (see Arab-Israeli Wars), OPEC was able to raise oil prices tremendously; the price hike caused inflation in oil-importing nations. Increases ensued from 1975 to 1980. However, as importing countries pursued alternate energy resources, OPEC was forced to lower prices by 1982. Oil prices remained low through most of the 1980s and 90s, with only a temporary hike during the Persian Gulf crisis of 1990–91 (see Persian Gulf War). With the cooperation of non-OPEC oil-exporting nations, OPEC was able to raise prices in 1999 by cutting production. As prices rose above $30 a barrel in early 2000, OPEC members agreed to increase production somewhat, cutting back production again a year later in an attempt to maintain prices. A worldwide economic slowdown caused oil prices to fall to near $20 by late 2001, but cutbacks by OPEC and non-OPEC nations, an economic rebound (including very strong economic growth in China), and the U.S. invasion and occupation of Iraq subsequently caused benchmark prices to rise and stay above $40 in mid-2004. Efforts by OPEC to control prices, however, have generally been less influential than market forces, which in 2008 drove the price of oil to nearly $150 in midyear and down to below $40 the year's end.

The Columbia Encyclopedia, 6th ed. Copyright© 2014, The Columbia University Press.

Selected full-text books and articles on this topic

OPEC from Myth to Reality
Cuervo, Luis E.
Houston Journal of International Law, Vol. 30, No. 2, Spring 2008
The Politics of the Global Oil Industry: An Introduction
Toyin Falola; Ann Genova.
Praeger, 2005
Librarian’s tip: Chap. 4 "OPEC and International Oil Organizations"
The Politics of Oil-Producer Cooperation
Dag Harald Claes.
Westview Press, 2000
Librarian’s tip: Chap. 6 "Oil, Economic Growth, and Political Institutions"
The Perfect Storm: OPEC and the World Oil Market
Kohl, Wilfrid L.
Harvard International Review, Vol. 26, No. 4, Winter 2005
Analysis of Alternative Scenarios in the World Oil Market; OPEC with and without Russia
Mahbobi, Mohammad; Bezymyannaya, Maria.
Journal of International Business Research, Vol. 12, No. 2, April 2013
PEER-REVIEWED PERIODICAL
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
OPEC: Some Tough Challenges Ahead
Ismail, Nehad.
The Middle East, No. 452, March 2014
The Natural Law Basis of Legal Obligation: International Antitrust and OPEC in Context
Moore, Joel Brandon.
Vanderbilt Journal of Transnational Law, Vol. 36, No. 1, January 2003
OPEC's Dominance of the Global Oil Market: The Rise of the World's Dependency on Oil
Rose, Euclid A.
The Middle East Journal, Vol. 58, No. 3, Summer 2004
PEER-REVIEWED PERIODICAL
Peer-reviewed publications on Questia are publications containing articles which were subject to evaluation for accuracy and substance by professional peers of the article's author(s).
Which Way Now for OPEC?
Ford, Neil.
The Middle East, No. 343, March 2004
OPEC: Ensuring an Energy-Secure Future
.
UN Chronicle, Vol. 40, No. 2, June-August 2003
How Wall Street Controls Oil: And How OPEC Will Be the Fall Guy for $90 Oil
Verleger, Philip K., Jr.
The International Economy, Vol. 21, No. 1, Winter 2007
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