MyMoney.my.id
  • Home
  • Ask and Answer
  • Psychological
  • Export import
  • About Us
    • Contact
    • Privacy Policy
Search
  • Contact
  • Blog
  • Complaint
  • Advertise
© 2023 MyMoney.my.id. All Rights Reserved.
Reading: OPEC: The Organization That Regulates Oil Production and Prices in Global Markets
Share
Sign In
Notification Show More
Latest News
How will the Layaway plan benefit retailers and customers?
Ask and Answer
Forbes’ 5 Best Crypto Exchanges
Psychological
Employee Stock Option Program (ESOP)
Ask and Answer
The Definition and Process of the Accounting Cycle: Understanding the Phases and Their Benefits for the Company
Ask and Answer
Dividend Reinvestment Plan (DRIP): Compound interest program on stock investment
Ask and Answer
Aa
MyMoney.my.id
Aa
  • Home
  • Ask and Answer
  • Psychological
  • Export import
  • About Us
Search
  • Home
  • Ask and Answer
  • Psychological
  • Export import
  • About Us
    • Contact
    • Privacy Policy
Have an existing account? Sign In
Follow US
  • Contact
  • Blog
  • Complaint
  • Advertise
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
MyMoney.my.id > Blog > Export import > OPEC: The Organization That Regulates Oil Production and Prices in Global Markets
Export import

OPEC: The Organization That Regulates Oil Production and Prices in Global Markets

admin
Last updated: 2022/12/06 at 7:47 AM
admin
Share
SHARE

In the 1960s, oil producing countries formed an organization called OPEC. They formed the organization as a form of dissatisfaction with the control of foreign oil companies over the resources they have. The main goal is that they can take control of oil production and regulate oil prices on world markets, as well as increase profits for its member countries. Since then, OPEC has grown to become one of the most important organizations in the world and plays a significant role in determining world oil prices.

In this article, we will discuss what OPEC is, including its history, organizational structure, goals and policies as well as their influence on world oil prices.

What is OPEC?

OPEC or Organization of the Petroleum Exporting Countries is an organization of petroleum exporting countries. Founded on September 14, 1960, in Baghdad, Iraq. And at that time it only contained 5 countries, namely Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. However, over time this organization grew and added more members, and in total OPEC now has 13 active members.

Indonesia itself was also a member of OPEC from 1962 to 2008. Indonesia did not extend its membership because it was no longer able to meet the production quota set by OPEC. However, in 2016, Indonesia re-entered the organization, but after announcing a temporary suspension of its membership at the end of the year after OPEC issued a policy for reducing oil production by 5%.

OPEC Organizational Structure

After OPEC was formed in 1960, this organization began to build an effective organizational structure to achieve its goals. Initially, OPEC only had a secretariat with headquarters in Vienna, Austria, which was tasked with managing organizational activities and acting as a bridge between OPEC members.

However, along with the increase in OPEC members and the development of this organization, the organizational structure of OPEC also began to develop. In 1975, OPEC formed the General Assembly, which is a meeting forum for all members of the organization. The General Assembly is responsible for determining the policies to be taken by OPEC.

In addition, OPEC also forms an Executive Committee, which consists of five members who are selected from member countries. The Executive Committee is responsible for supervising the implementation of policies determined by the General Assembly.

To regulate oil production activities, OPEC also forms an Oil Production Group, which consists of a representative from each member country. The Oil Production Group is tasked with managing the oil production of each member country in accordance with the policies set by OPEC.

Until now, OPEC’s organizational structure is still the same and continues to strive to achieve its main goal, which is to regulate oil production and oil prices on world markets and increase profits for its member countries.

OPEC Goals and Policies

The main purpose of the establishment of OPEC by oil producing countries is to regulate oil production and oil prices on the world market. So that they can increase profits for the member countries.

To achieve this goal, OPEC establishes a number of policies aimed at regulating the oil production of each member country. One of the most well-known policies is the oil production quota policy. By using this policy, OPEC determines the amount of oil each member country is allowed to produce to keep oil prices stable on the global market.

In addition, OPEC also often holds high-level meetings between the energy ministers of member countries to discuss policies to be taken. The meeting is called the OPEC Conference. Through the OPEC Conference, member countries can communicate and manage oil production together in accordance with established policies.

Criticism of OPEC

Even though it has a policy with a good purpose, namely to maintain the stability of oil prices in the global market, OPEC still often gets criticism regarding this policy. Most frequent has been criticism of OPEC’s lack of transparency in policy making. This is because OPEC rarely publishes every policy they take.

Another criticism is that OPEC is often accused of being an organization that does not fairly distribute the profits derived from oil sales among member countries. This criticism arises because there is a large difference in the income earned by OPEC member countries, where some member countries benefit more than other countries.

In response to these criticisms, OPEC has sought to increase transparency in policy making. This organization also continues to strive to expand the range of information conveyed to the public about its activities. In addition, OPEC has also attempted to make a more equitable contribution to member countries through its oil-related aid and resource development programs.

Even so until now, criticism of OPEC still continues to emerge, but this organization does not close their ears and continues to try to respond to these criticisms by improving its weaknesses.

OPEC and Geopolitics

Several OPEC production cuts have had a significant impact on the global economy. The most famous was in 1973, when Arab member states placed an embargo on the US and other countries that supported Israel during the Yom Kippur War. This embargo event is known as the “first oil shock”, it caused oil prices to quadruple in three months, and caused a fuel shortage in the US, and is considered as one of the causes of the prolonged economic crisis in the US and other countries in 2010. 1970s. .

Other major geopolitical events that significantly impacted oil prices include the Iran–Iraq War of the 1980s, the Gulf War of 1990–1991, the Asian financial crisis of 1997, and the global financial crisis of 2007–2008.

Most recently, crude oil prices crashed in mid-2020 as countries around the world went into lockdown. After that, OPEC+ members decided to cut production by 10 million barrels per day (about 10% of global production) to try to raise prices again.

You Might Also Like

Capital Export Neutrality

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
admin
Share this Article
Facebook Twitter Copy Link Print
Previous Article Value at Risk (VAR): Definition, Methods, Applications and Weaknesses
Next Article Market Anomalies: Definition, Causes and Examples
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Stay Connected

248.1k Like
69.1k Follow
134k Pin
54.3k Follow

Latest News

  • 6 Things That Make Trading Different from Investing

    6 Things That Make Trading Different from Investing

  • 5 Reasons Ethereum is Better than Bitcoin

    5 Reasons Ethereum is Better than Bitcoin

  • False Signals in The Forex Trading and the Risks

    False Signals in The Forex Trading and the Risks

  • How will the Layaway plan benefit retailers and customers?

    How will the Layaway plan benefit retailers and customers?

  • Get to Know Actuaries: Risk Analyst and Financial Problem Solver

    Get to Know Actuaries: Risk Analyst and Financial Problem Solver

Recent Posts

  • The 5 Largest Asset Management Companies in the World Based on AUM

    The 5 Largest Asset Management Companies in the World Based on AUM

    Asset Management or asset management companies have a major role in providing investment services to the public, both for individual investors and companies. At least, with the help of asset …
  • Get to Know Actuaries: Risk Analyst and Financial Problem Solver

    Get to Know Actuaries: Risk Analyst and Financial Problem Solver

    Some of you may already know that actuary is a profession related to risk analysis and measurement. Actuaries are known as “financial scientists” because they use mathematical and statistical methods …
  • Sidechain: Definition, Functions, and Weaknesses

    Sidechain: Definition, Functions, and Weaknesses

    Blockchain is a digital database where cryptocurrencies are transacted. Blockchain has network nodes that act as validators while maintaining the security of the blockchain network from hacking. In a crypto …
  • Lock Up: Definition and Benefits for Companies

    Lock Up: Definition and Benefits for Companies

    What is Lock Up? Lock up in shares means locking up shares belonging to certain investors so that they cannot sell their shares for a while. This policy is enforced …
  • What is a Large Cap Fund?

    What is a Large Cap Fund?

    A large cap fund is a mutual fund that has an investment portfolio in stocks with a large market capitalization. The investment allocation is indeed aimed at stocks with a …
  • How to Calculate Abnormal Return

    How to Calculate Abnormal Return

    What are Abnormal Returns? Abnormal Return is a return on investment that exceeds the expected return. In stock investing, this can happen when price movements become stronger due to events …
  • What is meant by Economic Recovery?

    What is meant by Economic Recovery?

    Economic recovery is the process of recovering or improving a country’s economic condition after experiencing a crisis or downturn triggered by various things, such as economic crises, natural disasters, wars …
  • Getting to Know the Business Environment: What is it and How to Understand It?

    Getting to Know the Business Environment: What is it and How to Understand It?

    The business environment is an important aspect that needs to be considered by an entrepreneur or businessman in managing and developing his business. Because the business environment includes all external …
  • Top 5 Best Investment Banks Based on Revenue

    Top 5 Best Investment Banks Based on Revenue

    Overview of Investment Bank An investment bank is a banking entity that acts as a party that collects and distributes capital to companies, government agencies and the government itself. The …
  • Polluter Pays Principle

    Polluter Pays Principle

    The Polluter Pays Principle is a generally accepted practice in which polluters must bear the costs of managing the pollution they create to prevent harm to human health or the …
  • Who Makes Transactions in the Forex Market?

    Who Makes Transactions in the Forex Market?

    Foreign Exchange (Forex) or foreign exchange (forex) has a dynamic value. Even price changes in the forex market can occur significantly in a short time. For example, when the release …
  • Use of Tokenomics in Cryptocurrency Analysis

    Use of Tokenomics in Cryptocurrency Analysis

    What is Tokenomics? Tokenomics is an economic model for digital currencies or tokens created with blockchain technology. This includes how tokens are used, how they are distributed, and how they …
  • What is Gamma Hedging?

    What is Gamma Hedging?

    Gamma hedging is a trading strategy that is carried out to try to maintain fluctuations or price fluctuations in the underlying asset that underlies price changes, especially on the last …
  • What is a Brownfield Investment? Advantages and Risks and How to Avoid Them

    What is a Brownfield Investment? Advantages and Risks and How to Avoid Them

    Brownfield investment is one type of investment that is often made by companies or investors. Brownfield investment is an investment made in a project or business that already exists and …
  • Market Anomalies: Definition, Causes and Examples

    Market Anomalies: Definition, Causes and Examples

    Market anomalies are understood as unusual conditions in financial markets. There are various causes, including geopolitical events, central bank intervention, changes in a country’s interest rates and so on. Knowing …

Most Viewed Posts

  • Days Sales Outstanding (DSO) (981,576)
  • Currency War, What Is It? (981,525)
  • Oligopsony: Resulting Implications and Possible Solutions (981,509)
  • Critical Mass in Business: Recognizing the Concept, Influencing Factors, and How to Achieve It (981,169)
  • Getting to Know the Contagion Effect and Efforts to Handle it in the Economic Sector (910,942)
Follow US

© 2025 MyMoney.my.id. All Rights Reserved.

Removed from reading list

Undo
Welcome Back!

Sign in to your account

Lost your password?