OPEC OIL

OPEC stands for the Organization of Petroleum Exporting Countries. The OPEC members include Algeria, Indonesia, Iran, Iraq, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Since oil revenues are so vital for the economic development of the OPEC members, OPEC means to bring stability to the oil market by adjusting their oil output to ensure a balance between supply and demand.

OPEC oil production provides around 40% of the world's oil and holds around 80% of the world's proven oil reserves. Because of this, OPEC controls a significant portion of world oil trade. OPEC, especially Persian Gulf OPEC members has the world's lowest oil finding and lifting costs.

OPEC history and aims

The main aim throughout the OPEC history is the co-ordination and unification of petroleum policies of the members and the determination of the best means for safeguarding their interests individually and collectively. It should also devise ways and means of ensuring the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations. OPEC also aims to give due regard to the interest of the producing nations at all times and to the necessity of securing a steady income to the producing countries; an economical and regular supply of petroleum to the consuming nations; and a fair return on their capital to those investing in the petroleum industry.

Non OPEC oil production

Non OPEC members account for the other 60% of the world's oil. Non OPEC oil production has been increasing steadily since 1993, with the United States, Russia, Mexico, China, Canada, Norway and the United Kingdom as the most prolific producers. Non OPEC oil production is expected to rise in coming years, with the greatest increases in the former Soviet Union and in Mexico.

World Oil Reserves

The world's crude oil reserves are far more concentrated in OPEC countries than elsewhere. Of the estimated 1.03 trillion barrels of proven reserves, 814 billion barrels are held by OPEC. The smaller reserves of the non OPEC oil producing countries are being depleted more rapidly and therefore their overall reserves-to-production ratio is much lower. This suggests that OPEC oil production will increase as a proportion of world production over the long term.