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OPEC

The Organization of the Petroleum Exporting Countries. OPEC. ORGANIZATION. Created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

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OPEC

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  1. The Organization of the Petroleum Exporting Countries OPEC

  2. ORGANIZATION • Created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. • Now also includes: Algeria, Angola, Libya, Nigeria, Qatar, and United Arab Emirates, Ecuador, Equatorial Guinea, and Gabon. • First headquarters in Geneva, Switzerland, in the first five years of its existence. • Now located in Vienna, Austria since 1965.

  3. Objectives • Co-ordinate and unify petroleum policies among Member Countries • Secure fair and stable prices for petroleum producers • Provide an efficient, economic and regular supply of petroleum to consuming nations • Provide a fair financial return to those investing in the industry.

  4. Prices!!!!! • Together, these 13 nations are responsible about 55% of the world's oil production • OPEC holds the majority of the world's oil reserves • When OPEC wants to raise the price of crude oil, it reduces production causing gasoline prices to jump because of the short supply • This maneuver can also be used if other countries raise the price of goods to the OPEC countries • Drops in oil production make gas companies very nervous. • If there is a threat of oil reductions gas prices will usually rise

  5. Who produces the other 45% • Several non-OPEC countries contribute to the world's crude-oil supplies, including the United States, Mexico, Canada, Russia, Norway, and China • The United States imports approximately 33.3% of our crude oil from Canada (#1) • OPEC keeps track of the oil production of these nations and adjusts its own production to maintain its desired barrel price.

  6. Shock at the pumps • 1970’s: Arab countries begin to reduce production to force USA and other western democracies to stop backing Israel. Gas shortage and high prices resulted. This embargo against the west led to a world wide recession • ..\..\My Videos\1973 gas embargo.mp4 • 1980’s: Iranians take US Embassy officials hostage during the Iranian Revolution. President Carter placed an embargo on Iranian oil and froze Iranian assets in the US banks. (They could not get their money!!!!!) • ..\..\My Videos\Carter Iran Crisis.mp4 • The 1980’s shortage was very short lived as non-OPEC countries began to increase production

  7. Still shocking!! • Persian Gulf War – 1990-1991 • Iraq invaded fellow OPEC member Kuwait • Kuwait pumped oil from a field that was below both Kuwait and Iraq • Iraq had gone into debt financing the war with Iran • Iraq oil money had dropped because of increased pumping by Kuwait and Saudi Arabia • Iraq was met by a surprising coalition of western countries, developing Communist countries, and Arab states. Saudi Arabia began to produce more oil to make up for that lost from Iraq and Kuwait

  8. OPEC Challenges • OPEC has faced challenges since 2013 • Long placed sanctions against Iranian oil were dropped in return for nuclear power deal. • ..\..\My Videos\GlobalWrap117_2Mb.mp4 • Political situation in Libya has decreased the supply of oil • Maintenance on Iraqi oil pipe lines and refineries has impacted their production and export

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