OPEC: What is it and why does it matter?
OPEC stands for Organization of the Petroleum Exporting Countries. It is an intergovernmental organization that was founded in 1960 by five oil-producing countries: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Today, OPEC has 13 members that together hold about 81.5% of the world's proven oil reserves and produce about 44% of the global oil output.
OPEC's main objective is to coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.
OPEC holds regular meetings where its members decide on their collective oil production levels and quotas. These decisions have a significant impact on the global oil prices and supply, as well as on the world economy and geopolitics. OPEC also engages in dialogue and cooperation with other oil-producing countries and organizations, such as OPEC+, which is a group of 11 non-OPEC countries that joined forces with OPEC in 2016 to balance the oil market amid a supply glut and low prices.
OPEC has faced many challenges and controversies throughout its history, such as the 1973 oil embargo, the 1980s price collapse, the 1990s Asian financial crisis, the 2000s oil boom and bust, the 2010s shale revolution and the 2020s COVID-19 pandemic. OPEC has also been accused of being a cartel that manipulates the oil market and restricts competition. However, OPEC has also been praised for its role in stabilizing the oil market and ensuring energy security for both producers and consumers.
OPEC is more than just an organization of oil exporters. It is a symbol of national sovereignty over natural resources, a platform for cooperation and dialogue among diverse countries and cultures, and a force for peace and development in the world.