Organization of Petroleum Exporting Countries (OPEC)

OPEC,
as a body of petroleum producers and marketers is perhaps the most hated
organization by the western world, especially the USA. Essentially, the body is
made up of mainly Arab nations in the Middle East and Nigeria. A critical look
at the countries in OPEC signifies that the body wants to curb the instability
in the world oil

prices of petroleum products

Irrespective
of the reasons that informed its formation, the truth must be said that OPEC is
a cartel i.e. a gang of sellers/producer that exist to hold to ransom a needed
input or commodity at the expense of other independent producers or sellers. It
does not permit the interplay of demand and supply forces to determine market
price, rather it fixes them via production quotas. Ion the laws of the USA
cartel operation is an economic crime
This
organization was established in September 1960 in Bagdad, Iraq. It is the
organization comprising oil producing countries and was established to put a
stop to the monopoly of foreign oil marketing companies and to ensure that oil
exporting countries in the 3rd world have a say in the level of
production and the prices for petroleum products
The
member of OPEC include, Nigeria, Ecuador Indonesia, Iran, Iraqi, Kuwait, Libya,
United Arab Emirate (UAE), Saudi Arabia And Venezuela.
Nigeria
is the only West African member of OPEC and it joined the organization in May
1970. OPEC has its secretariat in Vienna, Austria
Objectives
of OPEC
1.     
To stabilize oil prices in the world’s market
2.     
To see that member countries oil policies are harmonized
3.     
To ensure the stabilization of income obtained from oil to member
countries. OPEC guarantee stable income to producers while ensuring steady flow
of oil to consuming countries
4.     
It fixes and regulates productions quotas of member countries; prices of
oil and the royalties multinational companies where they extract oil
Contribution
of OPEC to member countries
1.     
Since the formation of OPEC, it has played major roles in the pricing
and supply of oil in the global market
2.     
Since January 1974, Nigeria and other member countries have been able to
obtained favourable prices for crude oil, putting an end to the unilateral
determination of the posted price by the oil companies. As at June 2004, all
prices have hit at all time high of between $38 to $40 dollars per barrels in
the wake of US invasion of Iraq and the overthrow of Saddam Hussein

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