1. Organization of Petroleum Exporting Companies (OPEC)

2. What is OPEC? An organization consisting of the world's major oil- exporting nations Produces half of the world’s oil exports, controls two thirds of the oil reserves in the world. Twelve member countries Manipulates oil production and oil prices. Statute (recent as of 2012) Outlines purpose of organization at founding Organizational structure of OPEC

3. What is OPEC? (continued) The Conference Supreme authority of organization Each country allowed a delegation, one vote Must unanimously agree on decisions Elected President and Alternate President The Board of Governors One vote, simple majority Two year terms The Secretariat The headquarters of the organization Carry out executive functions Representative of OPEC Three year term

4. What is OPEC? (continued) The Conference’s responsibilities (among others) Formulate policy Grant membership Appoint members to Board of Governors Approve budget, as suggested by Board of Governors Approve amendments to the Statute Appoint Chairman, Assistant Chairman of Board of Governors Appoint Secretary General

5. What is OPEC? (continued) Board of Governors’ responsibilities Implement the Conference’s decisions Submit reports and make recommendations to the Conference on the affairs of OPEC Submit budget proposal

6. Purpose Founded in 1960 Coordinating and unifying petroleum policies of member countries in order to safeguard individual and collective interests Role evolved from setting crude oil prices to regulating oil market by changing supply policy

7. Who is involved?

8. President Diezani Alison- Madueke, Nigeria Elected in Nov. 2014 Secretary General Abdallah Salem el-Badri, Libya Serving since 2007

9. Advantages of Membership Efficient Access to bigger world markets Better access to resources Greater influence Won’t be exploited by larger, industrialized nations

10. Disadvantages of Membership Can have too much control of product, cannot unilaterally decide production amounts Difficult to agree on policies, especially when all decisions must be unanimous Plans in short-term, prone to price fluctuations

11. International Impact Iran Heavily dependent on oil exports Considering return to oil market after nuclear talks, hopes of lifting sanctions and doubling oil exports http://money.cnn.com/2015/03/17/investing/iran- sanctions-oil-prices-opec/ http://money.cnn.com/2015/03/17/investing/iran- sanctions-oil-prices-opec/ Nigeria Struggling to reap benefits of membership Largest supplier of sweet crude oil, intensified trade with Asian countries following increased US domestic production

12. International Impact (continued) Arab countries in OPEC as well as Egypt, Syria, and Tunisia, proclaimed embargo in response to American invovlement in Yom Kippur War (1973) OPEC began to exercise economic and political strength By the end of embargo, oil prices rose from $3 to $12 a barrel Embargo against US, UK, Netherlands, Canada, Japan Created rift within NATO countries, many distanced themselves from American policy in Mid-East Considered “first oil shock,” followed by “second oil shock” of 1979

13. International Impact (continued) America abandoning Bretton-Woods agreement deflated valued of dollar (1971) OPEC countries saw little increase in real revenues Increased exploration of alternative energy resources in non-OPEC countries Mexico, Nigeria unprepared for significant price falls following 1979 embargoes

14. Works Cited http://www.opec.org/opec_web/static_files_project/m edia/downloads/publications/OPEC_Statute.pdf http://www.opec.org/opec_web/static_files_project/m edia/downloads/publications/OPEC_Statute.pdf http://www.opec.org/opec_web/static_files_project/m edia/downloads/publications/GenInfo.pdf http://www.opec.org/opec_web/static_files_project/m edia/downloads/publications/GenInfo.pdf http://money.cnn.com/2015/03/17/investing/iran- sanctions-oil-prices-opec/ http://money.cnn.com/2015/03/17/investing/iran- sanctions-oil-prices-opec/