OPEC Overview

OPEC is an acronym for the Organization of the Petroleum Exporting Countries, an international oil cartel featuring thirteen member nations : Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Established in 1960, its purpose has generally been to defend and champion the interests of its member nations on the global oil market.

Safe to say, they have been extraordinarly successful.

OPEC can be considerd a trade organization with precedents in numerous industries, but in practice it operates as a cartel. It isn’t alone. (by Barry Waters, Contributing Writer)

Inside This Section:

  • De Beers is a diamond cartel composed of a number of different companies involved in mining diamonds. Collectively, they control 40% of the world’s diamond production.
  • The MPAA (Motion Picture Association of America) is a ‘trade organization’ that protects and advocates the interests of major movie studios.
  • The RIAA (Recording Industry Association of America) is another ‘trade organization’ whose member businesses distribute about 90% of the recorded music sold in the US.

The latter two have faced chronic accusations of monopolizing their markets, of anti-competiton and price-fixing—in short, of collusion in an effort to control a market and eliminate their competition, all hallmarks of cartels.

In this piece we’ll look at the world before OPEC, its formation and rise to power, anti-competition accusations against it, the curious legal status it enjoys in the US, and some of the effects it has had, both temporary and long-term.

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