The Organisation of Petroleum Exporting Countries (OPEC) is the single most important (supply side) influencer in the global oil and energy markets. OPEC was originally formed by five members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. These were later joined by Qatar, Indonesia, Libya, UAE, Algeria, Nigeria, Ecuador and Gabon although in subsequent years the two latter members suspended their membership.
Using the theory of supply and demand as a controller of prices, OPEC basically controls the amount of oil it produces to increase or decrease supply and therefore influence pricing. OPEC accounts for 42% of the world’s oil production (2013) and 55% of oil trade, however more importantly OPEC accounts for almost 80% of the world’s proven reserves.
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