Organization Of Petroleum Exporting Countries - OPEC

AAA

DEFINITION of 'Organization Of Petroleum Exporting Countries - OPEC'

An organization consisting of the world's major oil-exporting nations. The Organization of Petroleum Exporting Countries (OPEC) was founded in 1960 to coordinate the petroleum policies of its members, and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.

INVESTOPEDIA EXPLAINS 'Organization Of Petroleum Exporting Countries - OPEC'

OPEC membership is open to any country that is a substantial exporter of oil and that shares the ideals of the organization. As of 2011, OPEC had 12 member countries, including founder members Iran, Iraq, Kuwait and Venezuela.


OPEC's influence on the market has been widely critcized. Because its member countries hold the vast majority of crude oil reserves (about 80%) and nearly half of natural gas reserves in the world, the organization has considerable power in these markets.

RELATED TERMS
  1. Organization Of Arab Petroleum ...

    An inter-governmental organization based in Kuwait that seeks ...
  2. Enhanced Oil Recovery - EOR

    Enhanced oil recovery (EOR) is the process of obtaining stranded ...
  3. Price Fixing

    Establishing the price of a product or service, rather than allowing ...
  4. Petrodollars

    The money earned from the sale of oil. The term "petrodollars" ...
  5. Sweet Crude

    A type of oil that meets certain content requirements, including ...
  6. Sour Crude

    The name given to barrels of crude oil that do not meet certain ...
RELATED FAQS
  1. Why did oil prices drop so much in 2014?

    Oil prices have been one of the most watched trends in economics during the 21st century. From 2000 to 2008, the price of ... Read Full Answer >>
  2. What causes oil prices to fluctuate?

    Oil is a commodity, and as such, it tends to see larger fluctuations in price than more stable investments such as stocks ... Read Full Answer >>
  3. How can growth investors benefit from investing in the oil & gas sector?

    The value of a company’s stock is typically determined by supply and demand. However, stock prices from oil and gas exploration ... Read Full Answer >>
  4. How can I create a yield curve in Excel?

    You can create a yield curve in Microsoft Excel if you are given the time to maturities of bonds and their respective yields ... Read Full Answer >>
  5. What are the different formations of yield curves?

    There are three main different formations of yield curves: normal, inverted and flat yield curves. The yield curve describes ... Read Full Answer >>
  6. What does a large multiplier effect signify?

    The multiplier effect depends on banks' reserve requirements. In macroeconomics, if a country exhibits a large multiplier ... Read Full Answer >>
Related Articles
  1. Home & Auto

    Getting A Grip On The Cost Of Gas

    Feeling overwhelmed by rising oil prices? We offer some tips that will save you money.
  2. Options & Futures

    A Guide To Investing In Oil Markets

    Find out how to take advantage of this market without having to open a futures account.
  3. Active Trading

    Why You Can't Influence Gas Prices

    Don't believe the water-cooler talk. Big oil companies aren't to blame for high prices.
  4. Active Trading

    How Does Crude Oil Affect Gas Prices?

    Find out how this commodity's fluctuating price affects more than just how much you pay at the pump.
  5. Economics

    Meet OPEC, Manager Of Oil Wealth

    This organization's decisions can influence oil prices, but there is a limit to its power.
  6. Investing Basics

    What is a Nominal Value?

    The nominal value of a security, such as a stock or bond, remains fixed for the duration of its life.
  7. Economics

    Explaining the Human Development Index

    The Human Development Index (HDI) is a metric developed by the United Nations to take the emphasis off economic growth and focus on human wellbeing.
  8. Investing

    The Case For Stocks Today

    Last week, U.S. equities advanced with the S&P 500 Index notching new records. Investors are now getting nervous with rate and currency volatility spiking.
  9. Chart Advisor

    Commodity Traders are Watching These 3 Charts

    As we head towards the summer months, many commodity traders are looking to diversify their holdings and to protect themselves against inflation.
  10. Economics

    Gaining Market Influence-- The Case of US Shale

    A convergence of sustained bank financing, falling production costs and rising oil prices might position the US shale industry for a greater market role.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center