1. SS7E6 c: Students will explain the primary function of OPEC
**take notes on the underlined information
Created by Sydney Spessard

2. When people or a country work together to produce things, and one focuses (specializes) on only part of the or production of one main export
Specialization

3. What is OPEC?
OPEC stands for Organization of Petroleum Exporting Countries
OPEC is a international group of oil-rich countries that work together to regulate oil price and supply , maintaining stable prices and production of petroleum

4. What countries are involved?
As of 2016, there are 13 members of OPEC: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela
**Indonesia has joined recently (as of early 2016), therefore it is not included on the map

5. Of all the OPEC countries, Saudi Arabia clearly exports the most oil.
Of all the OPEC countries, Saudi Arabia clearly exports the most oil.

6. What countries aren’t involved?
Out of the 10 top oil producing countries in the world, 5 aren’t involved in OPEC: The United States, Russia, China, Canada, and Mexico

7. What is the history of OPEC?
OPEC was organized in September 1960
Representatives for Venezuela, Iran, Iraq, Kuwait, and Saudi Arabia met in a conference in Baghdad, Iraq to discuss the potential of this oil producing organization
Saudi Arabia was the lead founder of OPEC
Baghdad, Iraq

8. Why does it matter?
Over 80% of the world’s oil reserves are located within OPEC countries.
Due to the fact that OPEC has control over the majority of Earth’s oil, OPEC countries have the power to place trade barriers, especially embargoes, on countries they have conflict with.
For example, the Arab countries in OPEC placed an oil embargo against the US for supporting Israel during the Arab-Israeli War (in the 1970s). This largely impacted our economy, as the US was strongly dependent on petroleum from the Middle East. Therefore, it is obvious that OPEC has the power to hurt other countries, simply by not selling them oil.
This is a political cartoon, created in the 1970s, where the truck represents OPEC, and the car that’s being run over symbolizes the U.S.’s economy.

9. How does this effect you?
precision-market-research.com
OPEC and non-OPEC countries are in a constant state of raising and lowering oil prices and production to maintain balance with each other.
If OPEC has petroleum set at a lower price, then non-OPEC companies must also lower their prices, so that they can also sell a lot of their petroleum, and be successful.
So, if you notice that gas prices sharply increase or decrease, it is most likely a result of US oil companies attempting to stay in balance with OPEC.
Supply and demand also impacts gas prices. If the demand for petroleum rises, so will the price. So, if the US purchases less foreign oil, the country will have less available petroleum, causing the prices to increase. On the contrary, if the US possesses more oil than necessary, the prices will lower, because the demand is low.

10. OPEC in the news…

12. Bonus Facts
The African Country of Gabon used to be a member of OPEC, until they withdrew from the organization in 1994
Indonesia left OPEC in 2009, but rejoined in 2016
The OPEC headquarters is located in Vienna, Austria
Vienna, Austria

13. Study Questions (Do you know your OPEC?)
What are the two primary functions of OPEC?
What OPEC country is the leader in production and exporting?
Is the US a member of OPEC?
In what continent(s) are OPEC countries located in?
In what year was OPEC formed?
Explain the relationship between supply and demand.
Explain how US petroleum companies would react if OPEC companies decreased its oil prices. Why?
In your own words, explain why OPEC is so powerful.

14. Bibliography: OPEC: www.opeg.org OPEC, britannica.com/topic/OPEC
How Gas Prices Work, consumption/gas-price.htm
OPEC Fast Facts, cnn.com/2013/07/30/world/opec-fast-facts/index.html
World’s Top Oil Producers, money.cnn.com