ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC): Opec was established in Baghdad, Iraq in 1960, following the meeting of five leading oil-producing countries summoned by Iraq. The five countries are Iraq, Kuwait, Saudi- Arabia, Venezuela, and Quatar etc.
NOTE: The headquarters of OPEC is in Vienna where ordinary meetings of the organization take place.
AIMS/OBJECTIVES OF OPEC
- To co-ordinate, unify and secure a common petroleum policy among member states.
- To fight for the interest of member states either collectively or individually.
- To help secure a high stability in oil prices in the international market.
- To control production level of member states.
- To ensure an efficient and uninterrupted supply of petroleum to consuming nations.
MAIN ORGANS OF OPEC
- The conference
- The Board of Governors.
- The secretariat.
- Special Economic commission.
- OPEC special fund.
ACHIEVEMENTS OF OPEC
- Has helped in stabilizing the prices of oil.
- Succeeded in regulating the production of oil among member states.
- Succeeded in raising the price of oil.
- Succeeded in ensuring that a uniform oil royalty is paid to oil producing countries.
PROBLEMS/WEAKNESSES OF OPEC.
- Inability of the organization to effectively regulate oil prices since its inception.
- Ideological differences among OPEC member states.
- Disagreement among member states on price to be charged per barrel of oil.
- The problem of granting production quota.
- Frequent international crisis, which often leads to fluctuation in oil prices.
- Violation of OPEC rules and regulations among member states.