OPEC POLICIES

Officially, OPEC’s mission is to coordinate… and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.”

OPEC’s influence on the market has often been an area of critical debate, because its member countries hold the vast majority of crude oil reserves at around 80% and nearly 50% of natural gas reserves in the world, therefore OPEC has considerable power in these markets. As a cartel, OPEC members would naturally have a strong incentive to keep oil prices as high as possible, while maintaining their shares of the global market.

The advent of new technology along with lower costs, and in particular with fracking in the United States, had a major effect on worldwide oil prices and has lessened OPEC’s influence on the markets. As a result, worldwide oil production has increased, and prices have dropped significantly, leaving OPEC in a delicate position in the current global climate.