Organization of Petroleum Exporting Countries

Abstract

This paper looks to answer following questions

Describe the market for oil including the large players in the oil industry before and after OPEC?

Using economic theory and empirical evidence analyse OPEC's effect on the world market for oil?

Critically examine the success or otherwise of OPEC in raising the price of oil?

What policy recommendations for the UN can be given as to how the market for oil can be made more efficient?

Table of Contents

CHAPTER 1: INTRODUCTION2

Background of the Research Study2

Aims and Objectives of the Research Study3

Problem Statement4

Significance of the Research Study4

Rationale of the Research Study7

Research Questions8

CHAPTER 2: LITERATURE REVIEW9

Theoretical Framework9

Characteristics of OPEC9

History of OPEC12

Changes in Economic and Political Factors14

Cartels and their Emergence16

Long-Term Stability18

Changes in Oil Prices19

Recent Developments21

Demand Security Needed22

Growth Observed23

OPEC and United Nations24

International Oil Companies and National Oil Companies25

CHAPTER THREE: RESEARCH METHODOLOGY37

Research Design44

CHAPTER FOUR: RESULTS , ANALYSIS AND DISCUSSION47

Algeria47

Egypt52

Libya58

Nigeria62

CHAPTER FIVE: CONCLUSION67

REFERENCES69

Chapter 1: Introduction

Background of the Research Study

The Organization of Petroleum Exporting Countries which is usually termed as OPEC is an important organization that has played major role in the market for oil in the whole world. The organization has been engaged in providing petroleum oil to major parts of the world like the United States and other countries. The countries that are involved in the Organization of Petroleum Exporting Countries are Saudi Arab, Kuwait, Venezuela, Yemen, Egypt, Iran, Iraq, Vienna, Nigeria, Algeria, Angola, Ecuador, Qatar and the United Arab Emirates. However, the main country that is involved in the regulatory practice of the OPEC is Saudi Arab. The OPEC is an international organization that has it's headquarter in Vienna. The organization held meetings on regular basis with the ministers of the member countries.

Different goals have been set by the organization however the main goal of the organization is the identification of the best possible ways for protecting the interest of the organization on the collective and individual basis. Other goals that are pursued by the organization are the stabilization in the prices of the oil in the international market and rectifying the problems that makes the prices of oil in the international market unstable. The organization also ensures that the member countries are earning stable income in the respective years. Similarly, the organization also takes care of the goals and objectives of the member countries while providing adequate levels of petroleum to the member countries at the same time. The organization also ensures that the member countries those are engaged in the investment activities in the OPEC are also getting reasonable revenues from them. Due to the attainment of all these goals, the organization has been very effective in setting the prices and providing petroleum oil to the importing countries. The organization has also proved to be very effective in setting the prices of the petroleum oil in the international market. Therefore, the role of OPEC has been criticized to large extent by different developing and developed countries that have gone through the effects of the raised prices of petroleum ...