What is the OPEC

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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OPEC is an acronym that stands for Organization of Petroleum Exporting Countries.  As the name implies, it is a group made up of countries that tend to export a great deal of oil.

The main purpose of OPEC is to help ensure a good deal for all of the countries that export oil.  By that, I mean that OPEC tries to make sure that the price of oil stays relatively high.  They do not want it to go too high for fear that demand will drop, but they also do now want it to go too low.

In order to try to influence prices, OPEC tries to control production.  It does this by setting limits for how much oil each member country can produce.

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william1941's profile pic

william1941 | College Teacher | (Level 3) Valedictorian

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The OPEC is the Organization of the Petroleum Exporting Countries and has 12 countries which are part of it now. It started in 1960 with five founding members which were Iran, Iraq, Kuwait, Saudi Arabia and Venezuela..

The criteria for joining the OPEC include that the nation should export a substantial amount of its crude oil and this should form a large part of its way of earning wealth.

The OPEC nations try to maintain the prices of the crude exported by all of them at a reasonably high level to ensure it allows them to make the maximum profits.

This has been criticized as a cartel by other nations which have to import crude and think the prices charged by the OPEC member countries are kept at very high levels as others nations do not have a choice.

krishna-agrawala's profile pic

krishna-agrawala | College Teacher | (Level 3) Valedictorian

Posted on

OPEC (Organization of Petroleum Exporting Countries) (OPEC) is an association of a dozen countries nations that are major exporters of petroleum crude with their economies heavily dependent on exports. Between them, OPEC members account for between two-thirds and three-quarters of the world's recoverable oil reserves.The OPEC members cooperate to increase their revenue from the sale of oil on the world market.

OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, to counter the attempts of Big importers of to keep the international prices of oil down. Its current membership  includes Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

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