OIL

Facts & Figures about OPECACW The Middle East: Oil Unit

2007-08

$98.63/Barrel 04/04/08

HE Abdalla Salem El-Badri Secretary General (Libya)

OPEC

Organization of Petroleum Exporting Countries

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.

OPEC member nations currently supply about 40% of the world's crude oil and 16% of its natural gas. At the end of 2003, OPEC nations possessed about 78% of the world's total proven crude oil reserves.

Organization of Petroleum Exporting Countries An organization consisting of

the world's major oil-exporting nations, OPEC was founded in

1960 to coordinate the petroleum policies of its members and to provide

member states with technical and economic aid.

Crude OilNaturally-occurring substance found in certain rock formations in the earth. Dark, sticky liquid Hydrocarbon

–Compound containing carbon and hydrogen, with or without non-metallic elements such as oxygen and sulfur.

Highly Flammable--burning creates energy.

Crude Oil MeasurementCrude oil is measured in barrels.

U.S. 19th C, stored in wooden barrels.

One barrel = 42 US gallons, or 159 liters.

Crude Oil also measured in tons.

The number of barrels contained in each ton vary depending on the type and specific gravity of each crude.

–However the average number considered would be around 7.33 barrels per each ton.

Proven Crude Oil Reserves in the World

World’s proven crude oil reserves estimated at > 1,000,000,000,000 barrels

–11 OPEC Member Countries hold > 78 %.

OPEC's Members in 2005 produced around 30.7 million barrels per day of crude oil, or 42.7 per cent of the world total output, which stood at about 71.8 million barrels per day.

Uses of Crude OilGas (LPG), kerosene, gasoline, oil and fuel oil. Refining crude oil produces:

lubricants insecticides asphalt perfumes

plastics synthetic fibers synthetic

rubbers detergents chemical fertilizers

>4,000 different petrochemical products.

How much crude oil does the U.S. produce and how much crude oil does it import?The U.S. produces 5.75 million barrels per day and imports 9.14 million barrels per day

What country supplies the most crude oil to the U.S.?Saudi Arabia. This OPEC member supplied 1.52 million barrels per day to the U.S.

What percentage of U.S. oil consumption does transportation account for?About 70%.

CONSUMPTION

PRODUCTION

OPEC Annual Meeting Notes

The following graphs/charts were presented at this year’s Annual OPEC

Conference

OPEC Prompts

1. What initially led to the rise of OPEC, and what factors limited its power in the beginning? EXPLAIN

2. Describe the key factors leading to each of the three OIL spikes/shocks. EXPLAIN

3. How might the U.S. respond most effectively toward OPEC to ensure a free flow of oil at fair prices, and what other options should be addressed/considered? EXPLAIN

Please respond thoroughly & thoughtfully to the following: Make several points

for each item…