OPEC: meaning and Objectives
OPEC stands for ORGANISATION OF PETROLEUM EXPORTING COUNTRIES.
As a reaction to the outrageous and unprecedented exploitation by the oil extracting multinational companies which at that time were controlling oil operations in the oil industry in the host countries, five of the Third World oil producing countries met at Baghdad, the capital of Iraq to form a countervailing power bloc against the oil companies. The outcome of the the meeting of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela held from September 10-14, 1960, aimed at protecting their mutual interest and to counter the atrocious act of foreign oil companies who produce and sell the oil in accordance with their own interest and the dictates of their governments foreign policies, was the formation of the Organisation of Petroleum Exporting Countries (OPEC).
Through the activities of OPEC in curtailing the activities of the oil companies and in forestalling the downward trend in crude oil prices, other oil producing nations were attracted to the organisation which made its membership to increase from five to thirteen. Countries like Qatar (1961), Indonesia and Libya (1962), United Arab Emirate (1973), Algeria (1969), Nigeria (1971) Ecuador and Gabon (1973), were admitted into the cartel in the above stated years.
OBJECTIVES OF OPEC
The objectives of the Organisation of Petroleum Exporting Countries (OPEC) include the following:
(i) Stabilization of price of oil in the world market in order to eliminate fluctuations.
(ii) Co-ordination and harmonization of oil policies of member nations to bring them in line with the standard set by OPEC.
(iii) Stabilization of oil income by its member- nations.
(iv) To ensure steady supply of oil to consuming nations.
(v) To negotiate for the participation of member- nations in oil exploitation and exploration.
(vi) It fixes and allocates production quotas to member-nations.
(vii) OPEC examines and ensures that participation of foreign multinational companies in oil exploitation and exploration does not jeopardize the interest of its member nations.
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