OPEC - Organization of Petroleum Exporting Countries
OPEC is an alliance of states with currently 15 member states. Except Ecuador and Venezuela, all countries are located in Africa or the Middle East. OPEC's goal is the worldwide regulation of oil prices to the benefit of the participating countries through artificial shortages of raw materials, price agreements and taxation of oil exports.
The current member states cover an area of 12.56 million km² and about 510.72 million inhabitants. At its peak in the mid-1970s, OPEC controlled around 55% of global oil sales.
Foundation and goals
OPEC was founded on September 14, 1960, after the oil price had reached a historic low. The national budgets of the then founding members were based primarily on the export of oil, so that some states got into financial difficulties. With a cartel of the most important oil exporters at that time, attempts were made to coordinate the production volumes among themselves and to raise export prices to a higher level. In order to be able to regulate the selling prices, oil companies were nationalized to a large extent. The remaining private-sector industries were forced to pay high taxes on their oil exports.
By 1975 alone, OPEC had grown to 13 countries, which could claim over 55 percent of the world's oil market. Only in the past 20 years have further oil deposits been developed worldwide that could supply the world market for a long time to come. OPEC's monopolistic influence on international trade prices has not reduced the price of oil. Even today, around 40% of world sales still come from OPEC countries.
At least every six months, the responsible ministers of the member countries meet in a joint meeting to discuss future measures. Here, production quotas and also oil prices are jointly determined.
Indonesia left OPEC for the first time in 2008 because its oil reserves were dwindling and it even had to import oil itself. In 2015, the country joined again, but was unable to maintain its status due to the production limits set by OPEC, and was soon regarded as a larger importer than exporter. Thus, Indonesia left the group again in 2016.
The most recent additions are Gabon (2016), Equatorial Guinea (2017) and the Republic of Congo (2018), all of which are by far the smallest oil producers in OPEC's portfolio. Together these 3 countries produce less than 2% of OPEC and less than 1% of the world market.
China's influence as a major consumer
After the turn of the millennium, China's economy developed explosively and the country needed large quantities of oil, which could no longer be covered by the development of its own oil reserves and the previous import volumes. In the period from 2004 to 2015 alone, the amount of oil imported by China tripled and it was initially even assumed that the oil reserves would be used up in a few decades. The price of crude oil rose to a record high of 66 US dollars per barrel in 2005.
Former member countries