Nations Flags: Organisation of Petroleum Exporting Countries

OPEC

OPEC was established in 1960, and consists of the major oil nations in the world. Venezuela and Iran where the first nations to push for an organisation that could work together to boost revenues from a commodity that drives the economies of the world.

This approach brought together Venezuela, Iran, Saudi Arabia, Iraq,and Kuwait. This group was formed in 1949, and expanded with the admittance of Algeria, Ecuador, Gabon, Indonesia, Libya, Qatar, Nigeria, and the United Arab Emirates.

However, Gabon withdrew in 1995, and Indonesia suspended its membership in 2009 as it became a net importer of oil. However, Indonesia has said that if this position be reversed, through better production, or more oil being discovered, it would return.

The impetus for forming this group was a law enacted in the US in 1960 which saw preferential deals granted to oil from Canada and Mexico, with the US citing ease of access to land-based oil in times of crisis. This led to plummeting prices for the other nations, and a push for those nations to work together to push prices back up.

OPEC has flexed its muscles before now, when the Arab-Israeli War drew a response, with the 1973 oil embargo. This led to oil supplies to the US and western Europe being halted, causing oil to rocket in price, and major damage being done to those economies.

OPEC, however, has not seen complete unity all the time. The Iran-Iraq war saw the organisation being divided into two camps, and currently, it is split between hawkish nations such as Venezuela, and Iran, and softer nations such as Qatar and Saudi Arabia. The hawks want to push prices up as high as they can, whilst the likes of Saudi Arabia believe that if prices of oil rise too far, then economic damage will be done to importing economies, as well as forcing those economies to engage in efficiency drives, and investment in alternate energy supplies which will ultimately cause the price of oil to drop as well as drastically cutting revenues to OPEC nations. Saudi Arabia, as the largest OPEC nation, has regularly ignored quota's, and kept its production high to keep the markets happy.

OPEC is no longer as influential as it used to be, with a lot of oil coming from non-OPEC sources, with Britain and Norway being net exporters of oil in Europe digging oil from the North Sea, Russia developing large reserves, along with many of the post-Soviet states, huge reserves being discovered in the Gulf of Mexico as well as Alaska. And Canada's oil sands covering an area bigger than England.

However, OPEC still accounts for roughly 65% of the worlds oil supply, giving it huge influence in the world market.

The flag of OPEC consists of 4 white discs on a light blue arranged to spell out the 4 letters of the organisation, with the stoke of the "P" running through the logo to resemble an oil drill.