Over six decades ago, five of the top oil producing countries came together to form an alliance in a bid to enhance co-operation and secure fair prices for the petroleum producers. Thus came into existence the Organization of the Petroleum Exporting Countries (OPEC).
The OPEC was founded by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela on September 14, 1960, after the countries held a five-day conference in Baghdad.
The organisation had its first headquarters in Geneva, Switzerland, but moved it to Vienna in 1965. Qatar, which joined the group in 1961, left the alliance in 2019, after five decades. It joined in 1962, suspended its membership in 2009, rejoined in 2016 and suspended membership again the same year. It first joined in 1973, left in 1992, returned in 2007 and later withdrew again in 2020.
The organisation’s mission is to “coordinate and unify the petroleum policies of its member countries” in order to safeguard the interests of the producers, as well as, the consumers, according to the official website of OPEC. The OPEC nations also seek to ensure that the oil markets remain stable so that they can provide “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 saw a rise in its influence during the 1980s, as member nations took control of their domestic petroleum industries and assumed a greater role in world oil markets, according to the organisation’s website. Qatar said its decision was connected to its strategy of focusing on natural gas production.
The headquarters of OPEC are located in Vienna, but Austria isn’t an oil-rich OPEC member. The originally five-member group has expanded and contracted over the decades as countries joined, left and rejoined. Indonesia has had an unusual relationship with OPEC. Ecuador has also left and rejoined OPEC. OPEC isn’t the same as OPEC+. OPEC is the core organisation of oil-producing countries, while OPEC+ is a broader cooperation framework that includes major non-OPEC producers such as Russia. OPEC doesn’t control all the world’s oil. A substantial share of global oil production comes from countries outside OPEC, including the United States, Russia, Canada, Brazil and Norway. OPEC has emerged as a global power over the decades. The alliance’s influence comes not just from its production capacity, but also from the concentration of reserves. Its members collectively hold a very large proportion of the world’s proven crude-oil reserves, giving the group considerable long-term influence over the oil market.
