What is the main goal of OPEC

OPEC

Organization of Petroleum Exporting Countries; was founded in 1960 with the aim of a common strategy of its 13 member countries towards consumer countries. The joint strategy consists in particular of price and quantity agreements and the channeling of profits back into the international capital market. The policy of OPEC caused a worldwide economic crisis in 1973/74 as a result of drastic price increases. For OPEC, due to the internal difficulties common to cartels (disagreement among members) and different defense strategies of the consumer countries (reduction of oil consumption, development of alternative sources), a loss of power is to be recorded in the period after 1978/79.

(Organization of Petroleum Exporting Countries) The Organization of Petroleum Exporting Countries was founded in 1960 by Saudi Arabia, Kuwait, Iran, Venezuela and Iraq. Today it also includes: Algeria, Ecuador, Gabon, Indonesia, Libya, Nigeria, Qatar and the United Arab Emirates. The aim of OPEC is to strengthen its members vis-à-vis the multinational oil companies by increasing and securing income from oil exports and a common oil policy. The organization of the crude oil exporting countries is an international cartel and in particular operates a coordinated price policy and regulation of production volumes.

In socialist economics: (Abbreviation for Organization of Petroleum Exporting Countries) Organization of petroleum exporting countries, a raw material cartel founded in 1960. Members are currently Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Libya, Abu Dhab (UAE), Algeria and Nigeria.

The aim is, among other things, the coordination and standardization of the oil policy of the member states as well as the protection of their individual and collective interests. especially the stabilization of oil prices on the international market. 01 is one of the most important internationally traded raw materials with a daily turnover of around 2 billion dollars. Oil is the basis of the petrochemical industry (fuels, plastics) and energy generation in most industrialized countries. The countries united in the Organization of the Petroleum Exporting Countries (OPEC) have not been able to maintain a supply cartel by agreeing on production quotas. New production countries as competition, internal organizational conflicts of interest and falling demand have limited the influence. > Commodity cartels

The Organization of Petrol Exporting Countries (OPEC) was founded in 1960 on the initiative of Venezuela by five producing countries to represent the interests of the international oil companies. The main goals of the organization are the coordination of the member states' oil policy, the safeguarding of their interests and the stabilization of the world market price by regulating the production volumes (supply quotas). OPEC consists of eleven member states, including Algeria, Indonesia, Iran, Iraq, Qatar, Kuwait, Libya, Nigeria, Saudi Arabia, Venezuela and the United Arab Emirates.

In formal terms, OPEC represents a cartel that had a decisive influence on the oil price increases, especially in the 1970s and 1980s. As a result of the financial flow resulting from the oil price development, there have been special developments in these countries with regard to per capita income, infrastructure and living standards (cf. Dülfer, 1997, p. 70). The world trade share of OPEC rose from 5.7% in 1970 to 15.2% in 1980. This strong shift in world trade shares in favor of the OPEC countries was mainly at the expense of the group of industrialized countries, whose share rose from 73.4% dropped to 63.9% in 1980 in 1970. With the oil price drop and the temporary drop in the price of oil in 1986, the trend in the 1970s was reversed. The world trade share of OPEC fell to 5.4% in 1986 (cf. Dieckheuer, 1998, p. 13t), »The most recent development of OPEC not only makes it clear that the price and quantity policy of a cartel is conflictual and therefore cohesion is constantly threatened, but that the relatively high monopoly price for the individual member states (...), which has been enforced at times, can ultimately even be harmful «(Dieckheuer, 1998, p. 103).

The OPEC countries have contributed to the liquidity of the banks operating there due to their "petrodollars" invested in the international capital market (euro-dollar market).

Overall, the price and volume cartel of OPEC shows how a temporary stabilization of export prices can be undertaken (cartelization). In a first step, the prices that are to be achieved on the world market will be standardized. In a second step, taking global demand into account, the supply quantities that will be brought to the world market as a whole, as well as the distribution of these quantities among the individual providers, are to be determined. Such supplier cartels have also been formed for other goods in the basic materials sector.

Abbreviation for Organization of the Petroleum Exporting Countries.

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