WHAT’S UP WITH OPEC?

WHAT IS OPEC? Stands for: The Organization of the Petroleum

Exporting Countries Produces half of the world’s oil exports. Set oil prices for their own profits. Made up of twelve countries. Controls two thirds of the oil reserves in the world. Manipulates oil production and oil prices around the

world.

Currently OPEC has 1,064,288 million proven oil reserves that are located all throughout the world

The headquarters are located in Vienna, Austria The members involved in OPEC are: Algeria, Angola,

Ecuador, the Islamic Republic of Iran, Iraq, Kuwait, the Socialist People’s Libyan Arab Jamahiriya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates & Venezuela.

All the countries in OPEC are either in Africa, South America, or the Middle East

THE GEOGRAPHY OF OPEC

THE COUNTRIES OF OPECCountry   Joined

OPEC  Location

 Algeria  1969  Africa Angola  2007  Africa Ecuador **

 rejoined 2007

 South America

 IR Iran *  1960  Middle East

 Iraq *  1960  Middle East

 Kuwait *  1960  Middle East

 SP Libyan AJ  1962  Africa

 Nigeria  1971  Africa

 Qatar  1961  Middle East

 Saudi Arabia *  1960  Middle

East United Arab Emirates

 1967  Middle East

 Venezuela*  1960  South

America

Main natural resource of OPEC countries is oil. The oil is located underground and is used to make

gasoline. More than three-fourths of the world’s oil reserves are

in OPEC member countries. Saudi Arabia leads the OPEC countries in oil reserves

by more than two times as much as any other country in OPEC.

OPEC countries are producing almost 30 million barrels of oil per day.

NATURAL RESOURCESOF OPEC

• Goal of God – make sure they work for God.• Try to make everybody in the world Muslim.• A famous Muslim term is “jihad” which means holy war.• Will do things like suicide bombing to get closer to god• Muslims are the main religion of many countries involved

with OPEC.• Monotheistic religion• Will kill non Muslims so the population of the world will

have more and more Muslims• Sharia – the sacred law of Islam

Oil prices depend on the amount of oil produced by OPEC. U.S. oil prices in the past have increased because of the oil

embargos created by OPEC. OPEC wants money and profits controls the production of oil

in order to control the price of oil. Oil prices have increased which has put the U.S. in debt when

they need to pay for oil. The U.S. has to borrow money to buy oil that they can’t pay

back right away. Americans have had to pay more for gasoline which has

caused most Americans to be able to buy less.

A U.S. PROBLEM WITH OPEC

OIL PRICES

A U.S. problem with OPEC

DANGERS OF DRILLING FOR MORE OIL IN THE U.S.

Drilling in the ocean could cause major oil spills such as the one recently caused by BP.

As the gas prices rise from OPEC, the US feels forced to look for their own oil and drill on land that has many natural resources such as in Alaska.

It causes major environmental damages including death of animals, plants, fish, as well as the destruction of thousands of acres of forests.

Drilling for oil is an expensive and complicated process which can experience many problems during drilling.

White house is trying to pass a bill about limiting the amount of drilling we do in the U.S.

Much of the oil used by the U.S. comes from countries that are members of OPEC.

This gives OPEC economic and political power over the U.S.

The U.S. is afraid to create conflict with OPEC countries in fear of causing oil prices to rise.

SOLUTION – Buy oil from non OPEC countries. SOLUTION – To use alternative sources of energy

such as natural-gas-powered cars or electric cars.

A U.S. problem with OPEC

U.S. IS DEPENDENT UPONOIL FROM OPEC

Solution for dangers of drilling in the U.S. and oil prices The U.S. is trying to create more fuel-efficient cars so they

won’t have to buy as much gasoline. Natural Gas Act for less imports of OPEC oil. Congress will try to pass a financial reform bill about energy. More solar and wind farms to create energy to reduce the

need for oil from OPEC. Natural Gas Act would provide tax incentives to use

domestic natural gas as a transportation fuel instead of using diesel fuel.

Would create new jobs in the natural gas industry.

SOLUTIONS – NATURAL GAS

Started with five countries in the 1960’s: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

Currently has 12 countries as members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, Qatar, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador, and Angola

Original purpose was to control oil prices. Changed purpose to control oil production as way to maintain profits.

Has grown in economic and political power due to its control of much of the world’s oil production.

The production of barrels of oil a day has increased

The amount paid for one barrel of oil has increased

HOW HAS OPEC CHANGED OVER TIME?

OPEC CHANGES OVER TIME

OIL PRODUCTION

OIL PRICES

Oil production rose sharply between 2002 and 2005 and has stayed somewhat the same between 2005 and 2011.

Oil prices however increased significantly between 2004 and 2008 but decreased sharply between 2008 and 2009.

More countries wanted to control oil prices and oil production

Additional countries joined OPEC increasing its size from 5 to 12 countries.

Changed purpose in 1980’s to controlling oil production due to falling oil prices and lower profits.

Dependence on oil has risen dramatically since the 1980’s and OPEC has had to increase oil production.

The economics and politics of the world have changed OPEC has changed to provide oil to all the countries.

WHY HAS OPEC CHANGED OVER TIME?

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BIBLIOGRAPHY

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