Economists often cite OPEC as a classic example of a cartel that cooperates to reduce market competition, but whose consultations are protected by the doctrine of State immunity under international law. However, their influence on international trade is periodically challenged by the expansion of non-OPEC energy sources and by the recurring temptation of different OPEC countries to exceed production ceilings and pursue conflicting personal interests. Say no to plagiarism. Get a tailor-made essay on "Why violent video games should not be banned"? Get the original essay The Organization of the Petroleum Exporting Countries is an intergovernmental organization of 14 nations as of May 2017, founded in 1960 in Baghdad by the five original members (Iran, Iraq, Kuwait, Saudi Arabia, Venezuela) and headquartered in Vienna since 1965. In 2016, the 14 countries accounted for approximately 44 percent of global oil production and 73 percent of global oil reserves "proven", giving OPEC major influence over global oil prices that were previously determined by multinational oil companies dominated by the United States. The stated mission of OPEC is "to coordinate and unify the oil policies of its member countries and to ensure the stabilization of oil markets, in order to guarantee an efficient, economical and regular supply of oil to consumers, a stable income for producers and a fair return. on capital for those who invest in the oil industry. The organization is also a leading provider of international oil market information. Other cartels include: The International Energy Agency (IEA) is one of the largest organizations involved in the oil and gas industry. The IEA is the energy forum of 26 industrialized countries. Established by the Organization for Economic Co-operation and Development (OECD) as an autonomous intergovernmental entity within the OECD in 1974 in direct response to the oil crisis, its members include: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary Ireland, Italy, Japan, Republic of Korea, Luxembourg, Netherlands, New Zealand, Norway (participates under a special agreement), Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom and United States. States. One of the IEA's overall goals, which reflects the original reason for the group's creation, is to look for ways to reduce the vulnerability of its members in the event of a supply disruption. The Organization of Arab Petroleum Exporting Countries (OPAEP) was established in 1968 and is based in Kuwait. Membership is limited to oil-producing Arab countries. The three founding members were Kuwait, Libya and Saudi Arabia. OPEC is not a cartel in the same sense as OPEC. OPEC is dedicated to development activities and increasing cooperation among its members. Repeatedly, OPEC members have demonstrated apparent anti-competitive cartel behavior through the organization's agreements on oil production and price levels. In fact, economists often cite OPEC as a classic example of a cartel that cooperates to reduce market competition, as in this definition from the OECD Glossary on the Economics of Industrial Organizations and Competition Law : International commodity agreements covering products such as coffee, sugar, tin and more. Recently, oil (OPEC: Organization of the Petroleum Exporting Countries) are examples of cartelsinternational agreements that publicly resulted in agreements between different national governments. OPEC members strongly prefer to describe their organization as a modest market-stabilizing force, rather than a powerful anti-competitive cartel. . In its defense, the organization was founded as a counterweight to the previous "Seven Sisters" cartel of multinational oil companies, and non-OPEC energy suppliers have retained sufficient market share to enable a substantial degree of global competition. Additionally, due to the economic "prisoner's dilemma" that encourages each member country individually to cut prices and exceed its production quota, widespread cheating within OPEC often erodes its ability to influence global oil prices through collective action. In 1949, Venezuela and Iran took the first steps toward OPEC, inviting Iraq, Kuwait, and Saudi Arabia to improve communication between the oil-exporting countries as the world recovered. of the Second World War. At the time, some of the world's largest oil fields were just beginning to come into production in the Middle East. The United States created the Interstate Oil Compact Commission to join the Texas Railroad Commission in the fight against overproduction. The United States was both the world's largest producer and consumer of oil; and the global market was dominated by a group of multinational corporations known as the “Seven Sisters,” five of which were headquartered in the United States after the breakup of John D. Rockefeller's original Standard Oil monopoly. Oil-exporting countries were eventually encouraged to form OPEC to counterbalance this concentration of political and economic power. OPEC is mainly Saudi Arabia, the dominant producer, and a few other subgroups, and Saudi Arabia alone acts as a dominant producer. (Alhajji and Huettner, 2000) Dermot Gatley (1984) conducted one of the first investigations and grouped approaches to modeling OPEC behavior into a dominant theoretical approach based on the wealth maximization model or a wealth maximization approach. simulation based on the target capacity utilization model. (Dermot Gatley, 1984) In 1998, Mabro studied and critiqued the literature on OPEC's behavior for the period 1960-1998 and grouped it into six categories, including: history, previous literature studies, economic modeling, political economy, policy proposals and specialist journals. report. (Mabro, 1998) OPEC behaves more like an oligopoly with Saudi Arabia as the price leader and largest producer. (Plaut, 1981) OPEC can control the global oil market by limiting supplies to increase prices and obtain some revenue. (Tussing, 1989) At the time of the 2011 Libyan civil war and the Arab Spring, OPEC began issuing explicit statements to counter "excessive speculation" in oil futures markets, accusing financial speculators of increase volatility beyond market fundamentals. On September 10, 2008, with oil prices still near $100 per barrel, a production dispute arose when the Saudis reportedly walked out of a negotiating session in which rival members had voted in favor of a cut of OPEC production. Although Saudi delegates officially approved the new quotas, they anonymously said they would not respect them. The New York Times quoted one of these delegates as saying: “Saudi Arabia will meet market demand. We will see what the market demands and we will not.