In the 1960s and 1970s, OPEC successfully restructured the global oil-production system so that decision-making authority and the vast majority of profits is in the hands of oil-producing countries. (a group whose members cooperate to reduce market competition) but one whose consultations may be protected by the doctrine of state immunity under international law. This has occurred most recently from the organization's 20 decisions to trim oversupply.Įconomists have characterised OPEC as a textbook example of a cartel In the 1980s, OPEC began setting production targets for its member nations generally, reductions in the targets lead to oil-price increases. In the 1970s, restrictions in oil production led to a dramatic rise in oil prices and in the revenue and wealth of OPEC, with long-lasting and far-reaching consequences for the global economy. The effect can be particularly strong when wars or civil disorders lead to extended interruptions in supply. The formation of OPEC marked a turning point toward national sovereignty over natural resources, and OPEC decisions have come to play a prominent role in the global oil-market and in international relations. As of September 2018, the 13 member countries accounted for an estimated 44 percent of global oil production and held 81.5 percent of the world's proven oil reserves, giving OPEC a major influence on global oil prices that were previously determined by the so-called 'Seven Sisters" grouping of multinational oil-companies. Founded on 14 September 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), it has, since 1965, had its headquarters in Vienna, Austria (although Austria is not an OPEC member state). The Organisation of the Petroleum Exporting Countries ( OPEC, / ˈ oʊ p ɛ k/ OH-pek) is an organisation enabling the co-operation of leading oil-producing countries in order to collectively influence the global oil market and to maximise profit.
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