Transcript OPEC and World Oil Prices

Erin Lowdon
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OPEC: The Organization of the Petroleum
Exporting Countries
◦ Permanent intergovernmental organization
◦ Created at the Baghdad Conference between
September 10th – 14th 1960.
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Founding Members
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Iran
Iraq
Kuwait
Saudi Arabia
Venezuela
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“to co-ordinate and unify petroleum policies
among Member Countries, in order to secure
fair and stable prices for petroleum
producers; an efficient, economic and regular
supply of petroleum to consuming nations;
and a fair return on capital to those investing
in the industry.”
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1960’s:
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1970’s:
◦ Formation of OPEC happened during a transition within
the international economic and political landscape
◦ Oil market was dominated by the “Seven Sisters”
◦ Stationed in Vienna, Austria
◦ Membership grew to 10 by 1969.
◦ Rose to international prominence during this decade
◦ Prices rose greatly twice resulting in the Arab oil
embargo in 1973 and the Iranian Revolution in 1979
◦ OPEC called for a new era of cooperation in international
relations
◦ OPEC Fund for International Development (1976)
◦ Membership grew to 13 by 1975.
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1980’s:
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1990’s:
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2000’s:
◦ Crash of 1986
◦ Petroleum revenue dropped below a third of earlier peaks = sever
economic hardship for Member Countries
◦ Environmental issues surfaces on the international energy agenda.
◦ Prices moved less dramatically than in the ‘70’s and ‘80’s.
◦ Adjustments were still being made to a post-Soviet world
◦ One country left while another suspended its Membership.
◦ Helped strengthen and stabilize crude prices in the early years of
the decade
◦ Prices rose to record levels in mid-2008 before collapsing in the
emerging global financial turmoil
◦ One country joined, another reactivated its Membership, and a
third suspended it.
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Current Members:
Iran
Iraq
Kuwait
Saudi Arabia
Venezuela
Qatar (1961)
Indonesia (1962): Suspended its membership from January 2009
Libya (1962)
United Arab Emirates (1967)
Algeria (1969)
Nigeria (1971)
Ecuador (1973): Suspended its membership from December 1992October 2007
◦ Angola (2007)
◦ Gabon (1975-1994)
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Year vs.OPEC Basket Price
120
100
80
60
40
20
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
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Spot Price of OPEC Basket & Selected Crudes Real
Price of OPEC Basket
Refiners’ Margin
Differentials
Crude Oil Production
Closing OECD Oil Stock Prices
World Oil Supply Demand Balance
Real GDP Growth Rates
Crude Oil Spot Freight Rates
Normal Currency per US$
http://www.opec.org/opec_web/static_files_proj
ect/media/downloads/data_graphs/MI082013.pd
f
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OPEC has dominated the oil industry since
their founding in the 1960’s
The US still imports oil
Oil-price.net Information
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OPEC’s Homepage
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http://www.opec.org/opec_web/en/index.htm
http://www.oil-price.net/en/articles/opecand-oil-prices-is-the-story-over.php