It's About the OPEC ( Organization of Petroleum Exporting Countries ) & Crude Oil.

2. Asit Dholakia &
TEAM
-Chetan Rajgor
-Yogendrasinh Gohil
Department of
Commerce and
Management.

3. Organization of the Petroleum Exporting CountriesOrganization of the Petroleum Exporting Countries
Headquarters :
Vienna, Austria
President : Rostam Ghasemi
Secretary General : Abdallah el-Badri

4. Organization of Petroleum Exporting CountriesOrganization of Petroleum Exporting Countries
Permanent inter-governmental organizationPermanent inter-governmental organization
12 oil producing and exporting countries12 oil producing and exporting countries
throughout Africa and Asiathroughout Africa and Asia
For these countries oil is the key toFor these countries oil is the key to
developmentdevelopment
What is OPEC?What is OPEC?

5. 
OPEC was formed at a meeting held onOPEC was formed at a meeting held on
September 14, 1960 in Baghdad, Iraq, by fiveSeptember 14, 1960 in Baghdad, Iraq, by five
Founder Members: Iran, Iraq, Kuwait, SaudiFounder Members: Iran, Iraq, Kuwait, Saudi
Arabia and Venezuela.Arabia and Venezuela.
 U.S. dollar is the unit of oil sales.U.S. dollar is the unit of oil sales.
 English is the official languageEnglish is the official language..
 41.7% of the world’s oil production comes41.7% of the world’s oil production comes
from OPEC.from OPEC.

6. Member CountriesMember Countries
1. Algerialgeria
2. Angola
3. Ecuador
4. Iran
5. Iraq
6. Kuwait
7.7. LibyaLibya
8.8. NigeriaNigeria
9.9. QatarQatar
10.10. Saudi ArabiaSaudi Arabia
11.11. United Arab EmiratesUnited Arab Emirates
12.12. VenezuelaVenezuela

7. • OPEC’s mission is to coordinate &
unify the petroleum policies of
Member Countries.
• Ensure the stabilization of oil
prices
• Regular supply of petroleum to
consumers
• Fair return on capital to those
investing in the petroleum
industry.
OPEC’s central objectives

8. • THE OIL PRICE DEPEND
ON…
 The price of a barrel of oil is the result of a
number of competing factors. (A Barrel of Crude
Oil contains 42 US Gallons (or 158.987 Liters) of
Petroleum Products.)
 How much oil is available, how much oil is
demanded by consumers, how much it costs to
get oil from the ground to the consumer, the price
of dollars and the potential that oil speculators
see for the price to rise and fall.

9. World Oil Production by
Region
•More than 2/3 of
increase in oil
demand will be
supplied by OPEC.
•They supply 40%
of the world's oil
production and half
of the exports.
•Least oil Supplied
By Eastern Europe
and FSU (Former
Soviet Union)

10. OPEC Conferences
 Meets every March & September.
 Unify policies to promote stability and
harmony in oil market.
 New member applications are
discussed.
 Budgets are decided upon.
 Recommendations and reports are
submitted.

11. FUNCTIONING OF OPECFUNCTIONING OF OPEC
Representatives of OPEC Member CountriesRepresentatives of OPEC Member Countries
(Heads of Delegation) meet at the OPEC(Heads of Delegation) meet at the OPEC
Conference to coordinate and unify theirConference to coordinate and unify their
petroleum policies in order to promote stabilitypetroleum policies in order to promote stability
and harmony in the oil market.and harmony in the oil market.
The Member Countries consider the currentThe Member Countries consider the current
situation and forecasts of market fundamentals.situation and forecasts of market fundamentals.
Any changes to be made in the petroleum policiesAny changes to be made in the petroleum policies
are considered.are considered.

12. Goal # 1: OPEC seeks to ensure the
stabilization of oil prices in international oil
markets, with a view to eliminating harmful
and unnecessary fluctuations

13. Goal # 2: OPEC’s role in overseeing
an efficient, economic and regular
supply of petroleum to consuming
nations.

14. Goal # 3: Ensure a fair return
on capital to those investing in
the petroleum industry.

15. Other Goals..Other Goals..
•Have stability in the market.Have stability in the market.
•Deliver steady supply of oil toDeliver steady supply of oil to
consumers.consumers.
•Get oil to people at reasonableGet oil to people at reasonable
and fair prices.and fair prices.
•To obtain these goals, OPECTo obtain these goals, OPEC
voluntarily produces less oil.voluntarily produces less oil.

16. INFLUENCING FACTORS FOR PRICE
RISE OF PETROL IN INDIA:
 Cost of crude oil:
Increase in crude oil
prices in the international
market is one important factor
responsible for increase in petrol
prices in Indian domestic market.
 Increased demand:
Strong economic growth of India and other
developing countries in Asia have increased huge
demand of petrol and other related essential fuels
resulted price hike in petrol in India.

17.  Mismatch of supply and demand:
Indian oil companies face problem to meet demands of petrol
with shortage of production and supply from oil refineries due
to high input cost in crude oil price.
 Tax burden:
Prices of petrol
and other petroleum
products varies
according to local
government policies
in imposing taxes on fuels.
Whenever
government of India increases tax on fuels
the oil companies in India have no
other alternative to increase the
petrol price to recover losses and
maintaining marginal profits in
oil business in India.

18. • OPEC established the OPEC Fund for
International Development (OFID) in
January 1976 to promote cooperation
between OPEC Member Countries and
other developing countries.
• It has supported a wide range of
projects, from providing clean water
and energy to remote villages, to building
schools, hospitals and roads
and developing industry, farming and
trade opportunities.

19. In particular, OFID aims to help
poorer, low-income non-OPEC
countries in their pursuit of
social and economic
advancement.
 OFID is active in many regions,
including Africa, Asia, Europe
and Latin America.

20. OPEC support environmental policies
1. OPEC is looking to participate in
international collaborative efforts in
Research and development (R&D) programs
geared at improving carbon capture and
storage technology.
2. OPEC Member Countries are also investing
heavily to improve the environmental
credentials of oil by tackling gas-flaring and
promoting safer and cleaner drilling,
transportation and refining processes.

21. 3 . OPEC is concerned about the
environment and wants to ensure that it
is clean and healthy for future
generations.
4. OPEC considers that the development of
technology is important for limiting or
reducing greenhouse gas emissions.

22. OPEC’s attitude towards fuel-
efficiency..
OPEC fully supports technological
improvements that make
transportation cleaner, safer and
more efficient.
The Organization would like more
people to enjoy the benefits of
personal mobility in an
environmentally sustainable manner.

23. •OPEC has always recognized that crude oil is a finite
resource. By managing its production, the
Organization aims to enable many generations to
benefit from its use.
•During the 20th century, oil dramatically transformed
the world for industrialized countries.
• It is doing the same for developing countries.
Technologies that enhance fuel efficiency are,
therefore, welcome.

24. WHAT DOES THE OILWHAT DOES THE OIL
PRICE DEPEND ON?PRICE DEPEND ON?
• The price of a barrel of oil is the result of a
number of competing factors: How much
oil is available, how much oil is demanded
by consumers, how much it costs to get oil
from the ground to the consumer, the
price of dollars and the potential that oil
speculators see for the price to rise and
fall.

25. ConclusionConclusion
• This implies that if OPEC adopts a unified strategy which
is almost impossible to achieve--of contrived scarcity
whereby oil production is to be curtailed, it will have
only a limited effect on international oil markets, leaving
the dominant effects to the interaction of world supplies
and world demand for oil.