The Organization of Petroleum Exporting Countries (OPEC) is an intergovernmental alliance that coordinates and unifies the oil policies of its member countries. Created at the Baghdad Conference in the fall of 1960, the five founding members are Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. These founding members were later joined by other members: Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Angola, and Ecuador (which suspended its membership from December 1992 to October 2007 and then reinstated). Indonesia became a full member in 1962, but suspended its membership in 2008. Gabon was a member from 1975 to 1994. OPEC was registered with the United Nations Secretariat in 1962.
OPEC’s reason for establishing itself was to unite against the Western oil companies that were driving down prices. OPEC member countries produce roughly around 40% of the world’s crude oil and 15% of its natural gas. Because of this, and the estimated reserves these countries have, OPEC can, and does, have a strong influence on the oil market and prices.
Members meet formally twice a year – in March and September – and may hold other extraordinary meetings as required or necessary. A delegation from each member country attends the conferences. Members consider the current oil market situation, economic growth forecasts, supply and demand issues, as well as other issues when formulating their decisions, for example, to increase or decrease oil production. The actions taken by OPEC are generally felt around the world.
The OPEC Secretariat serves as the cartel’s headquarters and executive functions are handled there. The Secretariat was first located in Geneva, but moved to Vienna, Austria in 1965, where it remains today.